Central Oregon’s job recovery slows dramatically, after months of hot hiring, economist says

(Update: Regional economist looks at factors leading to hiring squeeze)

BEND, Ore. (KTVZ) -- Preliminary Central Oregon employment estimates for April reveal the pace of job recovery slowed dramatically for much of the region after several months of hot hiring, the Oregon Employment Department's regional economist reported Tuesday.

Both Deschutes and Jefferson counties posted job gains largely consistent with the normal seasonal pattern, Regional Economist Damon Runberg said. However, Crook County posted strong enough gains to push total nonfarm employment above the pre-COVID peak in February 2020.

Asked why hiring has slowed, when there is such a squeeze on businesses and demand for workers, Runberg provided this analysis to NewsChannel 21:

"There are a variety of reasons why it has been difficult for businesses to find workers in our labor market. It is important to remember that Central Oregon is nearly recovered from the pandemic shock. The region has added back  14,200 of the 17,500 jobs lost last spring. Our current levels of employment are equal to what they were in 2019 when many considered the region at “full employment.

"However, there are a few more additional reasons why the labor market feels tight. First, COVID remains present and continues to impact local businesses. Many workers have been yo-yoed between employed and unemployed as the local restrictions have fluctuated and businesses experience COVID outbreaks.

"Second, roughly half of the job losers who remain unemployed today are on temporary layoff. These folks remain attached to the previous employer and continue to wait for the business to call them back to work. These folks are not active job-seekers, as they were told by the business that laid them off that they will get their job back.

"Third, labor force participation rate remains lower than before COVID. Many workers have dropped out of the labor force likely due to early retirement, child care issues, or safety concerns.

"Fourth, excess unemployed only remains in a few occupation groups, such as food services workers, but levels of unemployment are now below pre-COVID levels for many other occupations.

"Lastly, unemployment insurance is more generous today with the $300 weekly federal boost. Many workers who would otherwise be active job-seekers may be sitting on unemployment insurance longer than they would without this boost. However, work search requirements are now being re-implemented across Oregon, which will make it increasingly difficult for these claimants to sit on the sidelines," Runberg wrote.

However he added, "I don’t think work search requirements are the silver bullet solution to the labor shortage. I think we could drop the federal benefits AND implement work search requirements and it would still be relatively difficult to fill job ads. Better? Yes. A complete solution? No."

Here's the rest of his monthly report.

Crook County: The seasonally adjusted unemployment rate was 7.6% in April, up slightly from 7.4% in March. The unemployment rate remains higher than before the first impacts from COVID-19 in February 2020 when it was 4.4%.

Preliminary estimates reveal that employment levels rose sharply in April, up 150 jobs (+2.2%) on a seasonally adjusted basis. These monthly gains were enough to push employment in Crook County above the pre-COVID peak in February 2020.

The strong hiring in April was largely concentrated in hard hit industries that continued to rehire from earlier layoffs. Leisure and hospitality added 220 jobs in April; professional and business services added 150 jobs; and construction added 100 jobs.

Deschutes County (Bend-Redmond MSA): The seasonally adjusted unemployment rate was little changed at 6.3% in April compared with 6.4% in March. The unemployment rate remains higher than before the first impacts from COVID-19 in February 2020, when it was 3.3%.

After several months of very strong hiring, preliminary estimates reveal that the employment recovery stalled in April, with hiring largely in line with seasonal trends (+740 jobs). Employment levels in April 2021 remained down around 4% (-3,600 jobs) from the pre-COVID peak in February 2020.

The year-over-year change is now capturing the large losses from the initial lockdown this time last year, with total nonfarm employment up 12,120 jobs from April 2020. These year-over-year changes are no longer a reflection of the employment situation before the onset of COVID-19. To gauge where non-seasonally adjusted industry employment sits compared with the pre-COVID peak, we can go back one additional year and compare the most recent estimates to the same month in 2019, Runberg said.

Several industries had employment levels that remained lower in April 2021 than in April 2019, including leisure and hospitality (-1,590 jobs); professional and business services (-500); local government education (-490); and manufacturing (-230). Meanwhile, a few industries posted employment levels notably higher than April 2019, including private education and health services (+720 jobs); retail trade (+410); transportation, warehousing, and utilities (+260); and construction (+240).

Jefferson County: The seasonally adjusted unemployment rate dipped slightly to 7.0% in April, down from 7.2% in March. The unemployment rate remains higher than before the first impacts from COVID-19 in February 2020 when it was 4.1%.

Hiring stalled in Jefferson County, with businesses only adding 120 jobs in April 2021, slightly less than the typical seasonal gain of 160 jobs. Despite these slower gains in April, total nonfarm employment is fast approaching pre-COVID levels, down only 50 jobs (-0.7%) from February 2020.

The weak seasonal hiring in April was largely due to a loss of 40 jobs in the manufacturing sector. Most other industries posted modest gains in April.

Next Press Releases

The Oregon Employment Department plans to release the May county and metropolitan area unemployment rates on Tuesday, June 22 and the statewide unemployment rate and employment survey data for May on Tuesday, June 15.