Oregon’s 2018 banner economic year

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By Josh Lehner,
Office of Economic Analysis,

2018 was another banner year for the economy. Jobs in Oregon are on pace to increase 2.1% which is good growth for the ninth year of an economic expansion. More importantly these gains are still strong enough to accommodate the influx of new residents and the Oregonians entering or coming back into the labor market. The unemployment rate is on pace for another historic low at 4.0% even as the population grows and participation rates by age cohorts are higher than a few years ago.

While topline indicators look great, improvements continue to be seen underneath the surface as well. In the past couple of years, economic growth is translating into better economic outcomes, including rising incomes, across Oregon’s industries, regions, and racial and ethnic groups. As such, two of the biggest under the radar outcomes this past year are rural areas regaining their employment levels from a decade ago, and the poverty rate for Oregon’s communities of color reaching a likely historic low.

First, let’s look at employment in rural Oregon. Both urban and rural areas of the state, in aggregate, lost the same percentage of their jobs during the Great Recession. However, urban areas returned to growth first — Portland in particular, being the biggest and most diverse economy in the state — and have been at historic highs for years. Rural areas, on the other hand, spent nearly 4 years at the bottom of the Great Recession with meaningful job growth only returning in 2014 or so. Fast forward to today, employment in Oregon’s rural counties is now back to where it was prior to the Great Recession. This is not a destination, but is an important milestone to note.

Of course there is a lot of variation across rural Oregon. Every county and regional economy is different. Places like the North Cost, Gorge, and Northeastern Oregon have all done and continue to do well. Our southern regions have seen less robust gains. That said, the median rural county is 80% recovered in terms of jobs today relative to pre-Great Recession peaks. Only a few have seen hardly any growth this expansion, namely Crook, Gilliam, Grant, and Harney. Looking forward, Oregon’s rural economies will continue to grow and improve. The vast majority of the demographic drag is in the rearview mirror.

The second major under the radar milestone reached this past year is a likely historically low poverty rate for Oregon’s communities of color. I say likely because Census redesigned the race question in 2000. Before then a person could only choose one race, where as beginning with Census 2000, a person could choose multiple races. As such historical figures are not perfectly comparable to current figures. I also only went back to Census 1980 to crunch the numbers. That said, we know from earlier work that the economic recovery is reaching all groups in Oregon even as big racial gaps remain. And even though this refers to 2017 data, it was released in 2018.

Now, just as there is not one uniform rural Oregon, there is considerable variation among the various racial and ethnic groups in the state as well. Relative to recent history, American Indian and Alaska Natives in Oregon currently have a record low poverty rate, as do Hispanics. Black Oregonians are near historic lows, but they current experience poverty rates about one percentage point higher then seen in 1999 or just as the economy crashed a decade ago. Poverty rates seen among Asian or Pacific Islander Oregonians are somewhat higher than a decade ago.

As discussed before, big disparities remain in the economy. This includes industry trends, geographic differences, outcomes by race or ethnicity, or outcomes by educational attainment, and the like. However, as the expansion continues, these disparities are expected to narrow. A tight labor market does wonders, even if it does not cure all ills. 2018 was another example of this and expectations are 2019 will be another good year for the economy.