The Oregon Biz Report - Business News from Oregon

Downtown Portland sees decline in jobs,
Continued positive feelings on safety, cleanliness
By Portland Business Alliance,

Business Census and Survey also shows spike in mass transit commuting Portland, Ore. – Signs of the country’s economic downturn are evident throughout the Central City, according to the results of the Portland Business Alliance’s annual Downtown Business Census and Survey. The survey showed a significant drop in jobs as well as a decline in the number of businesses expecting to expand over the next few years.

In the annual survey, which counts jobs in the I-5/I-405 corridor, the Alliance found that the total number of people employed in the Central City fell from 86,000 in 2007 to fewer than 83,000 in 2008. Also, government-related entities now account for half of the top 10 employers in the downtown core.

Despite Tough Economy, Most Americans Happy on the Job, National Survey Finds
But national survey finds job-satisfaction level sees sharp decline from 2008

RICHMOND, Va., Aug. 27, 2009 – Americans are happy at work, just not as happy as they used to be. According to a just-released national survey – the third annual SnagAJob.com Labor Happiness Index – more than half of the U.S. workforce (58%) says they are happy on the job, but that figure is down 7 percentage points, a significant drop from 2008.  The survey, conducted by Ipsos Public Affairs, polled more than 1,000 salaried and hourly employees across the country.

“Even as we continue to face layoffs and other corporate cutbacks, the majority of the American workforce remains upbeat about their jobs,” said Shawn Boyer, founder and CEO of SnagAJob.com. “But on the whole, we’re not as happy. Ongoing anxiety about the economy may well be chipping away at the happiness level.”

By Bill Conerly, Businomics, Conerly Consulting

Oil prices rose as Fed Chairman Ben Bernanke offered positive thoughts about the economy.  Does a strengthening world economy mean higher oil prices in 2010?  Not so fast, Bucky.

From Federal Housing Financing Agency,

Oregon’s Workweek Partially Rebounds
by David Cooke
Oregon Employment Department

A closely watched measure of state economic activity is average weekly hours for manufacturing production workers. This monthly indicator has been available for Oregon for many years. The measure was close to 40 hours per week in early 2008 but then dropped rapidly as the recession took hold. Its low point was reached in March 2009 at 35.5 hours per week, which was by far the lowest reading in more than seven years.

GOOD NEWS: New jobless shrinks, building permits up,  and Tourism is up (lodging and Air travel)
BAD NEWS: Payroll declines, Home sales drop,

By Timothy Duy
Director, Oregon Economic Forum
University of Oregon

The LCBI declined 1.7% in the second quarter of 2009, the eighth consecutive quarter of deterioration.  The pace of deterioration, however, slowed notably, setting the stage for firmer activity in the second half of this year.  Highlights of the LCBI include:

- The labor market remained weak. Although initial unemployment claims continued to decline, indicating a slower pace of layoff, the demand for new hours was anemic.  Nonfarm payrolls continued to decline.

By Patrick Emerson
Oregon Economics Blog

I came across an interesting post on the Portland Architecture Blog (where I indulge my fantasy life as an architect) which muses whether Portland has grown beyond the minor leagues. The idea, in essence, is that Portlanders are no longer in minor league sports because we have become a major league city even without the major league teams. It is an interesting notion but it made me think about another aspect of the economics of sports.

Winner-take-all markets are those in which extremely small differences in ability can lead to humongous differences in rewards (compensation). These markets are usually characterized by reproducibility of effort. Popular music is one classic example. It used to be that musicians had to preform live and necessarily to a limited audience. So a slightly more talented musician may draw a few more people in the audience, but the differences were small. With high fidelity recordings, suddenly the market was virtually unlimited and a slightly more talented musician could sell perhaps millions more than a slightly less talented one.

White House economists see increasing unemployment for the next 12 months
By Dr. Eric Fruits,
Oregon Economist
EconInternational,

The White House budget office has released its latest economic and fiscal projections. It predicts the largest deficits since World War II and increasing unemployment. The White House unemployment prediction highlights the impotence of the stimulus package passed earlier this year. As the figure above shows, at the time, the administration predicted that the stimulus would have halted job losses by the middle of this summer.

New York Times reports, “Eighteen of the 20 cities tracked by Standard & Poor’s Case-Shiller Home Price Index showed improvement in June, up from eight in May, four in April and only one in March…For all the improvement reflected in the new Case-Shiller report, housing prices are still down sharply in comparison to last year’s figures. The increases reported on Tuesday show up when June’s transaction prices are compared with those of the month before. But when this June is compared with June of 2008, the 20-city composite index is still down 15.4 percent — an improvement from the 19.1 price decline of last winter. Average home prices are now at the level they were in early 2003.”

Oregon Supreme Court Denies Employee’s Wrongful Discharge Claim for Reporting Unlawful Trade Practices
by P.K. Runkles-Pearson
Stoel Rives LLP, Attorneys at Law

The Oregon Supreme Court has denied a car salesman’s wrongful discharge claim. In Lamson v. Crater Lake Motors, Inc., the salesman, Kevin Lamson, claimed he was terminated for complaining to his employer that an outside entity managing sales on his employer’s car lot was engaging in unlawful trade practices.  Lamson refused to participate in special promotional events run by the outside company,  because he believed company was engaging in sales tactics that were unethical and unlawful.

As the World of Work has discussed earlier, wrongful discharge is a common law remedy.  One way a plaintiff may assert the claim is by arguing that the employer terminated him for fulfilling an “important societal obligation.”  Oregon courts determine what obligations qualify by reviewing state statutes and the state constitution.

According to the Wall Street Journal Market Watch, “The Federal Deposit Insurance Corp. on Friday announced four more bank failures, including a Texas bank with total assets of about $13 billion, pushing this year’s tally up to 81.  Guaranty Bank of Austin, Texas became the 81st bank failure of 2009 after it was closed by Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corp. as receiver, the federal agency said late Friday. Guaranty Bank also joined the list of the 12 biggest U.S. bank failures of all time. “

Forty-five Percent of Employers Use Social Networking Sites to Research Job Candidates, CareerBuilder Survey Finds
Career Expert Provides DOs and DON’Ts for Job Seekers on Social Networking

CHICAGO, August 19, 2009 – As social networking grows increasingly pervasive, more employers are utilizing these sites to screen potential employees. Forty-five percent of employers reported in a recent CareerBuilder survey that they use social networking sites to research job candidates, a big jump from 22 percent last year. Another 11 percent plan to start using social networking sites for screening. More than 2,600 hiring managers participated in the survey, which was completed in June 2009.

By Bill Conerly, Businomics, Conerly Consulting

Yesterday I said that the hard evidence for the recession being over was a little soft, with only three of the four main coincident indicators turning up.  Today’s announcement of industrial production gives us a second indicator that has turned up, at least for one month.  Here’s how it looks:

A couple of other pieces of good news:  Germany and France reported growth in the second quarter, and the Survey of Professional Forecasters has turned more optimistic.  This is the same shift that the Wall Street Journal reported from its forecast panel.  I’ve always said that the consensus forecast was important to look at both for the forecast itself, and for the direction of forecast revision.  This strong upward revision in the forecast is very good news.

The latest report from the Bureau of Economic Analysis shows the latest changes in personal income of Metro areas.

Personal Income: Change from 2007-2008   (Metro areas only)

By Biz-Watch,

On July 31st, Defend Oregon placed a full-page ad in the Portland Business Journal in support of the two tax increases increases (Corporate minimum and higher income earners) passed by the Oregon Legislature.  The message was straight to the business community with the headlines that read “We can save our schools, protect the vulnerable, and still have the lowest corporate taxes in the West.”  The ad is in response to a referendum drive launched to stop the tax increases.

The referendum supporters called Oregonians Against Job Killing Taxes, have now started a television ad that is seen on CNN, MSNBC and Fox. Here is their ad.

MarketWatch Reports: “WASHINGTON (MarketWatch) — An economic recovery may begin soon, and data suggest that the recession is bottoming out, the Conference Board said Thursday.For its fourth consecutive monthly gain, the index of leading economic indicators rose 0.6% in July, following an upwardly revised increase of 0.8% in June. However, July’s gain was below the consensus forecast of 0.7% from economists polled by MarketWatch.  Overall, six of the 10 indicators were positive contributors, three were negative, and one was steady. The interest rate spread was the largest positive contributor, while a reading on consumer expectations was the largest negative contributor.”

Oregon July Unemployment: 11.9%
By Patrick Emerson
Oregon Economics Blog

Oregon’s July unemployment was 11.9%, virtually the same as the (revised) 12% figure for June. The good news is that the pace of job losses is slowing dramatically. 700 jobs were lost in July compared to 3,400 (revised) in June and way down from the peak of the job loss figures we were seeing at the end of last year and the beginning of this year.

What does it all mean? I think we can be reasonably confident that the official recession in Oregon will end this year (and may have already). So we are close to bottoming out. But the recovery is going to be slow and I believe it will take a few years to regain the jobs we lost.

The Congressional incentive plan Cash-for-Clunkers is running into serious problems across the country.  Hundreds of dealers in New York are giving up the program:

Breitbart reports, “Hundreds of auto dealers in the New York area have withdrawn from the government’s Cash for Clunkers program, citing delays in getting reimbursed by the government, a dealership group said ..about half its 425 members have left the program because they cannot afford to offer more rebates. They’re also worried about getting repaid.”(The government) needs to move the system forward and they need to start paying these dealers,” said Mark Schienberg, the group’s president. “This is a cash-dependent business.” Continue reading

Riley Research Poll Press Release,

Oregon residents were asked to rate their favorability with the legislature’s the end of May and again after the session had concluded the in June. We observed a small drop in the percentage of unfavorable ratings, from the mid-session results. A little over one-fourth of those surveyed had a favorable view of the legislature’s work (28 percent), while about one-third had an unfavorable view (34 percent), and the remainder was unsure or undecided (37 percent).

Stephen Bernard reports, “Financial services executives believe business conditions will bottom in 2009 before a recovery in the sector and broader economy occurs next year, according to a new study from KPMG LLP.  About 70 percent of the 130 executives polled believe revenue and profitability in the financial services sector will improve in 2010, according to the business climate survey conducted by the audit, tax and advisory firm. However, respondents were split about whether a recovery among financial firms will lead or lag a rebound in the broader U.S. economy.”  Continue: