Oregon jobless rate stall despite job gains

Oregon’s seasonally adjusted unemployment rate was 8.5 percent in June, essentially unchanged from 8.4 percent in May, despite job gains in several sectors and the highest manufacturing-job level in three years, the Oregon Employment Department reported Tuesday.

Oregon’s unemployment rate dropped from 9.6 percent a year ago, in June 2011. Meanwhile, the U.S. seasonally adjusted unemployment rate was 8.2 percent in both May and June.

Oregon’s seasonally adjusted nonfarm payroll employment rose by 1,700 in June. The May figure was revised upward to show a gain of 7,600 jobs.

Hiring was strong in the manufacturing sector as well as transportation and utilities, but those gains were partially offset by declines in government and service jobs.

Carolyn Eagan, regional economist in Bend, said the civilian workforce has grown since March and the jobs added since then “seemed to have kept pace with the labor force growth, but have not been large enough to move the” jobless rate.

She also noted that June is traditionally when a large number of high school or college graduates enter the workforce, seeking employment.

“There really wasn’t much job creation in June,” said Nick Beleicikis, a state Employment Department economist in Salem. “Looking over the past four months, however, 13,600 jobs have been added since February, and the unemployment rate has come down from 8.7 percent in February to 8.5 percent in June.

“So there has been relatively strong job growth recently and the unemployment rate has fallen, but it takes longer than one month for these trends to develop.”

In June, two of the major industries posted large seasonally adjusted job gains: manufacturing (+900 jobs) and trade, transportation, and utilities (+1,700). These gains were partially offset by declines in government (-1,200 jobs) and other services ( 1,000).

Manufacturing added 3,300 jobs in June, which was 900 more than its expected gain. Durable goods added 2,700, with wood product manufacturing (+1,300 jobs), fabricated metals (+300), machinery (+200), and computer and electronic (+200) all gaining. Nondurable goods added 600 jobs.

At 168,700, seasonally adjusted manufacturing jobs were at the highest level in more than three years. The sector added 6,800 jobs since its low point in October 2009, but is still well below its pre-recession peak of 208,900 reached in July 2006.

Trade, transportation, and utilities added 1,900 jobs in June, which was well above the industry’s normally flat seasonal pattern for the month. Wholesale trade continued along its trend line of the past two years. It has now regained nearly half of its employment losses seen in 2009.

The recent employment numbers in retail indicate an accelerating trend. Seasonally adjusted employment is up by 3,100 or 1.7 percent between April and June. This rapid upturn follows slower growth throughout most of the prior two years. Retail, like wholesale, is also nearly halfway back to its pre-recession peak, which occurred more than four years ago.

Government edged downward by 300 jobs in June, when a gain of 900 is the typical seasonal pattern. Federal government added close to its normal amount for June as it grew by 1,000 jobs heading into the summer months, when many natural-resource based federal agencies experience their heaviest workloads.

State education dropped by 300 in June, while the rest of state government rose by 600. Meanwhile, local government education shrank by 2,400 jobs heading into summer vacation.

For about four years, government employment in Oregon has been generally declining. A major exception was the temporary federal hiring in 2010 associated with the decennial census.

Excluding that census hiring, seasonally adjusted employment in government peaked in late 2008 at just over 300,000. Between then and early 2011, overall government job losses were moderate, leading to mid-2011 employment of about 297,000.

Over the past 12 months, losses have accelerated, with the comparable June 2012 employment falling to 289,600.

Over the past four years, several government sectors have seen substantial job cuts. Between June 2008 and June 2012, job losses of more than 5 percent occurred in federal government (-1,600 jobs or -5.3%) and also in local government education (-6,200 jobs or -5.9%). These two sectors saw the largest percent job declines over that four-year period.

Most of the rest of local government saw job losses as well, but not as steep as the job declines in local education. The industry category that includes all of local government excluding education and Indian tribal cut employment by 1,700 jobs or -2.0 percent over the four-year period.

During that same four-year period, the only government industry category showing a substantial job gain was state government education. Trends were very positive in this industry as it grew by 3,500 jobs or 11.7 percent. Meanwhile, state government excluding education declined slightly over the period (-200 jobs or -0.4%).

Turning back to analysis of the industries in June, the only other major industry showing a marked decrease in its seasonally adjusted employment was other services. It cut 1,200 when its normal pattern is essentially flat. Job losses stemmed primarily from religious organizations cutting staff leading into summer.

Most of the remaining major industries posted small gains in June and no others posted losses. Six of these industries each added between 100 and 300 jobs on a seasonally adjusted basis; combined, these gains added 1,300.

During the prior four months, the average workweek for Oregon manufacturing production workers was flat, as it ranged within one-tenth of an hour around 40.0 hours per week.

The flat trend in recent months puts this average workweek above levels seen during most of the past 12 years. The exception was at the peak of the last economic cycle, when this manufacturing metric averaged about 40.2 hours per week during 2005 through 2007.

Average hourly earnings dropped a little in June, as is normal for the time of year. June is typically the low point of the year for these earnings. The average wage was $22.05 per hour for private-sector payroll employees. Wages were up 2.4 percent from June 2011, when the average was $21.53.

The national unemployment rate was 8.2 percent in both May and June. Oregon’s June rate was 8.5 percent. The difference between the Oregon and the U.S. unemployment rates was not statistically significant.

The latest figures indicate that Oregon’s seasonally adjusted unemployment rate has generally been on a declining trend for three years, after reaching a high of 11.6 percent in May and June 2009. It has been close to 8.5 percent during March through June.

In June, 172,489 Oregonians were unemployed. This was 20,110 fewer individuals than in June 2011, when 192,599 Oregonians were unemployed.