Oregon grows above average, labor shortages loom

Timothy A. Duy
Oregon Economic Forum
Department of Economics, University of Oregon

Below is the University of Oregon State of Oregon Economic Indicators for May 2021. The release date is June 30, 2021. Special thanks to our sponsor, KeyBank.

Link to full report (with charts!) here.

Oregon’s economic recovery gained steam in May. The Oregon Measure of Economic Activity rose to 0.42 in May from 0.05 in April.

— The moving average measure, which smooths out the monthly volatility, was 0.30 where zero is the average pace of growth since 1990; currently, Oregon’s economy is growing at an above average pace.

The household sector made a modest negative contribution to the measure; all other sectors contributed positively. The largest contribution came from the employment components of the services sector; these components are generally improving as firms add back workers shed during the pandemic.

The University of Oregon Index of Economic Indicators rose 0.5% in May for the sixth consecutive monthly gain. Initial unemployment claims fell modestly; claims will head lower this week as the recovery progress.

— Employment services payrolls, mostly temporary help, fell slightly; widespread reports of labor shortages suggest that hiring is slower than expected due to a lack of available workers.

— Housing units permitted rose. Single family home construction strengthened over the past year on the back of strong demand driven by the Millennial generation aging into the homebuying years.

— The weight distance tax (a measure of trucking activity) rose while new orders for core-capital goods edged down but in the context of strong gains in recent months. Manufacturing hours worked rebounded and consumer confidence edged higher.

The economy continues to rebound quickly from the pandemic recession. Progress should continue as the pandemic comes under greater control and more restrictions on activity lifted.

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