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MICHAEL DUNNE: I'm Michael Dunne. If you're confused by the state of our national and state economy, you're not alone. Many experts believe that there is a great deal of uncertainty in the overall economy right now. Consumer confidence is down. Tariff impacts are still bubbling under the surface, and many large employers are sending out somewhat pessimistic earnings guidance, yet the overall employment rate in the US is still surprisingly robust, and while unemployment is higher in Oregon than nationally, we're still in pretty good shape. Today, on the show, we'll talk to Oregon's lead employment economist to get a sense of where we are and where we might be headed. There's still a lot of unknowns out there, and we'll seek some clarity from an expert. Gail Krumenauer, the state employment economist at the Oregon Employment Department, thanks so much for coming on and talking with us.
GAIL KRUMENAUER: Hi, thanks. It's great to be with you.
MICHAEL DUNNE: Why don't you give us an overall labor picture for Oregon right now, and sort of where do you see it headed for now and into the remainder of 2025?
GAIL KRUMENAUER: Oregon employers lost 2700 jobs in July, and have lost jobs for three consecutive months now. In July, construction added 2900 jobs over the month. So that was a big gain. At the same time, financial activities dropped. 2700 jobs. Professional and business services lost 1400 jobs. And healthcare and social assistance, which has been a jobs leader, lost 1100 jobs in July. If we take a look at the broader picture over the past year, total nonfarm employment dropped by almost 25,000 jobs in Oregon, and that's a decline of 1.2%. We do still have job gains, and those have been highly concentrated in private health care and social assistance. The sector added almost 10,000 jobs over the past year. And I should mention that this is similar to the trend that we're seeing in the US as well, where we're starting to see slower job growth that's more highly concentrated in healthcare and social assistance, that's been going on for more than a year in Oregon, and it's been going on for more than a year in the US as well, okay, also over the past year, Oregon has seen its steepest job declines in manufacturing. Oregon manufacturers cut 9400 jobs over the year. That's a decline of 5% and again, this is similar to what we're seeing in the US, although not quite as severe. Manufacturing employment in Oregon peaked more than two years ago, and similarly, manufacturing employment nationwide also peaked more than a couple of years ago. And we've seen declines in the sector, both in Oregon and in the US, over the past couple of years, but those drops have been steeper here.
MICHAEL DUNNE: Okay, any reasons why that you've been able to determine? I know, the semiconductor and electronic components industry has been getting a lot of attention with big announcements over the past year or so.
GAIL KRUMENAUER: That whole industry has lost 4200 jobs, so it's down by 12.5% over the year. We've also seen other areas of manufacturing struggle as well. So, it's not just that one part. We've seen that transportation equipment has lost 500 jobs over the past year. We've seen wood products employers drop 400 jobs over the past year. And in food manufacturing, fruit and vegetable preserving, which is something that Oregon's had as a specialty, those companies have lost 1000 jobs over the past year. So many parts of the manufacturing sector are struggling.
MICHAEL DUNNE: Okay, we're talking in the shadow of a lot of uncertainty in the economy, and some of that has to do with federal action, tariffs and whatnot. I’m certainly not an economist, and that's why I have you on, is to determine is just general uncertainty about the economy. Does that impact job growth? Does it impact unemployment rates? If there's a way to quantify uncertainty, what do you think about uncertainty?
GAIL KRUMENAUER: We've heard this anecdotally, and we're seeing a little bit in the data, has put some employers on pause. One of the ways that I'm following that, and our team here in the research division is following, is to take a look at employer hiring demand. Oregon is one of just a few states that does our own job vacancy survey. So, we're asking private employers each quarter what job vacancies they are actively recruiting for at the moment, and what we've seen in the first half of 2025 is that hiring demand has stabilized just a little bit above 50,000 which is right about at the same level as the pre-pandemic period. One of the things that we're not seeing, though, is that bump up that we would typically expect, we expect to see more job vacancies heading into summer. So that's something that we're tracking to see if, if we're looking at employers actually pausing the way that we're hearing businesses say, in terms of hiring in Oregon.
MICHAEL DUNNE: One of the other things that's been happening is a lot of cuts to the federal workforce, but a lot of those people work in Oregon in various departments like the Forest Service. Have you seen how federal cuts to employment have percolated down to us here in Oregon?
GAIL KRUMENAUER: We have seen the federal government trending down slightly this year for the most part. We haven't seen the impacts of those buyouts that happened with federal government workers early in the year that haven't hit payrolls for the most part yet. So that's an additional downward pressure for payroll employment as we get through the end of this year and into the beginning of 2026 federal government employment makes up about 1.5% of jobs in Oregon, more heavily concentrated in some of the rural areas, because the Forest Service and the Bureau of Land Management are the largest federal employers in the state. When it comes to what we're going to see in terms of job numbers, we don't know exactly what will happen, but to the extent that there were folks who took those buyouts and they're still on paid administrative leave through September or until the end of the year, they are still being paid on those payrolls, so they're still being counted as jobs, okay, and those payment or severance or administrative leave agreements end, and their employment is then formally ended, we could expect to see further job cuts hitting the payroll numbers at that point.
MICHAEL DUNNE: Okay, there's another issue from the federal government that's happening throughout all states, including Oregon, and that's real strong enforcement about immigration, and we're talking about ICE raids and those sorts of things, I didn't know if, and that's why I'm asking you, is, are we seeing immigration enforcement, or fear of immigration enforcement sort of percolating down towards lower employment rates here in Oregon?
GAIL KRUMENAUER: We don't have data points here related to immigration in the labor force. What we're seeing in the monthly job numbers is that Oregon's labor force is continuing to grow slowly, but grow the growth that we're seeing in or there's two pieces to the labor force, there's the employed part, so people who are working and people who are unemployed but actively seeking work, and the growth that we've seen in Oregon over the past year or so far in 2025 has been in that unemployed portion of the labor force. So, we're still seeing a bit of labor force growth. That doesn't mean that there aren't other policy factors or other things that are slowing labor force growth compared to what it would otherwise be. That's a potential but we don't have a data point to see that one thing that is different between Oregon and the US is that our unemployment rate has been on the rise between the end of last year, when we were at 4.3% unemployment rate, we've seen little changes months to months, but the cumulative effect has been that Oregon's unemployment rate has risen to 5% as of July. Now, nationally, we've seen the unemployment rate stay pretty stable between four and 4.2% so far this year. But the difference is that nationally, we're seeing the labor force decline in recent months. So, unemployment can go down for a couple of different reasons. One could be people are in the labor force, and they move from being unemployed to finding a job and being employed. So, the unemployment rate goes down. Another way the unemployment rate can stay down is if people either drop out of the labor force or if they're unemployed, but then they stop looking, they're no longer counted, and that would keep the unemployment rate artificially lower.
MICHAEL DUNNE: If there's a word or two that you would use to describe Oregon's employment rate right now, what would it be? I mean, are we resilient, but perhaps trending upwards? Are we weakening? Are we in troubling territory? What would you characterize where we are right now with regard to employment and unemployment?
GAIL KRUMENAUER: Recently revised data show that Oregon lost 25,000 jobs over the past year, and we're seeing several sectors losing notable amounts of jobs over the past year. Manufacturing has lost 9400 jobs over the past year. Like I said, that's a decline of 5%. Construction lost 4600 jobs over the year. Financial activities lost almost 4000 that's a drop of 4% in each of those industries. We're also seeing retail trade that has been shedding jobs for a couple of years now. It declined by almost 4000 jobs as well just this past year, which is a loss of about 2% and each of those sectors that I've just named, manufacturing, construction, financial activities, retail trade, these are six-digit industries employing 100,000 people or more in the States, they're rather large, and they're struggling. One of the things that we're seeing happen on the unemployment side of that is the number of first time claims for unemployment insurance is relatively low. So, we're not seeing what we would expect to be the next natural step, people losing their jobs through no fault of their own, and then those first time, claims for unemployment insurance continuing to spike upwards. We're not seeing that. What we are seeing instead, and again, this is something that we're seeing nationally and, in the US, is that the number of continued or ongoing claims has been running higher this year than it has been in the past. And what I think is happening in terms of the unemployment side is that when we have slow, highly concentrated growth in healthcare and social assistance, which has been the case to varying degrees, right in Oregon and in the US, that's not necessarily an easy match for those sectors that are struggling. So finding that next job opportunity might be getting more difficult for folks who are still looking.
MICHAEL DUNNE: A couple things again nationally, but I wanted to get your take on how it permeates down to us here in the state. The Fed has signaled that they may be looking at a rate cut coming up next month, this September. What might that do to the employment picture here in Oregon, if at all?
GAIL KRUMENAUER: It's hard to say, Well, wait and see, one of the things that I think has been a drag on industries like construction and financial activities, which includes real estate and rental and leasing is that high, relatively high interest rates for things like Home Loans has been an ongoing thing for a few years. Now, the rate to get a 30-year loan is between six and 7%. That's relatively high compared to what we've seen. And so, I think anything that helps make it more affordable for more folks to get into that market could be a benefit, but it's hard to say what's going to happen until it happens.
MICHAEL DUNNE: Okay, okay. And then, of course, tariffs. You know, there's been so much back and forth, up and down on tariffs, I just didn't know, generally speaking, with the tariff stance that we have in this country right now, how might that impact employment or unemployment going forward?
GAIL KRUMENAUER: I think it continues this sense of uncertainty that folks are feeling and so anecdotally, we've heard from employers, and we're seeing it a little bit in the stable, but not increasing job hiring for this type of for this time of year that we're seeing there, there does seem to be a bit of pause in what people are saying in terms of that hiring demand out there. So, I think that tariffs can contribute to that uncertainty for some employers who are heavily affected.
MICHAEL DUNNE: Gail, can you put into context for us what a 5% unemployment rate is for Oregon?
GAIL KRUMENAUER: We have comparable unemployment data going all the way back to 1976 in Oregon, and in that broader arc of time, a 5% unemployment rate isn't that high just in the past decade, though, a 5% unemployment rate is relatively high for us outside of the pandemic recession and recovery period. The last time unemployment was this high in Oregon was in the middle of 2015 or the beginning of 2016.
MICHAEL DUNNE: A lot's been made of presidential action against the head of the Bureau of Labor Statistics, and I just wanted to ask you in terms of your confidence in the numbers that you get from the BLS today and moving forward?
GAIL KRUMENAUER: It's a great question. And right now, as of today, we do have confidence in the Bureau of Labor Statistics or BLS numbers. Do I believe that employment growth is getting slower and more highly concentrated in healthcare and social assistance nationally and in Oregon? Yes, we and every state, work in partnership with the Bureau of Labor Statistics to publish the monthly employment and labor force data that I've been talking about with you today and that we present publicly every single month. Our economists and analysts are currently reviewing the data reported by employers, along with the BLS economists and analysts in the same way that we have in prior months and prior years. We monitor that data closely, so any significant change would be noticed, and we're the ones who are out there doing that, that good, collaborative work with them in all of the states, with the federal partnership that we have had established for years, and that work is ongoing.
MICHAEL DUNNE: Okay, what are you looking for in the rest of the year? What? What are some things you sort of want to see to perhaps improve the unemployment rate here in Oregon, or kind of, what are some clouds you might be looking at in the next six months or so that could adversely, in fact, impact our unemployment rate?
GAIL KRUMENAUER: There is a series of indicators that our research team has been tracking to help us gage the health of the economy, that includes the monthly employment numbers that we've been talking about sustained, ongoing job losses are a hallmark of economic downturns, so seeing a few months of job losses in a row is concerning for us. That's not to say that will necessarily continue. We've had periods over the past couple of years where we've lost jobs for a month or a couple of months and then rebounded. So that's something we're keeping a close eye on. Those claims, unemployment insurance claims are another thing that we're keeping a close eye on, whether or not we're starting to see those first time claims continually increase week after week, or if they stay relatively low and again. With the ongoing claims, we're seeing those running a bit higher, to see what happens with those as well, because in weaker economic times, those numbers tend to ramp up to high levels, so that's another thing that we're tracking. Employer hiring demand is another thing that I've been talking about and that we are tracking closely. When we get into times of greater economic weakness, in addition to more layoffs, we also see fewer job openings now. Right now, we're not seeing job openings fall out, but it is stable. It's stable around pre pandemic levels. We're also looking at, probably the most popular indicator of economic health is gross domestic product, so that is the final value of all goods and services produced in the United States. Changes in GDP are the most popular indicator of the nation's overall economic health. We've seen that there was one quarter of decline at the beginning of the year and then a rebound in the second quarter. Both of those items were related to imports and exports, which has a lot to do with people trying to work around tariffs. You know, get ahead of them or get inventory up before those go into effect. So, it's hard to say what we'll see going forward with those as well. But typically, the conventional wisdom has been, if you get two consecutive quarters of negative GDP growth, then you could be in a time of greater economic distress as well. So those are just some of the indicators that we're tracking, some of the more popular ones, but there are a lot of other things that especially like in summer, thinking about Oregon is a tourism state, right? So, looking at the flow of international traffic to our largest airport, PDX, looking at some of those more anecdotal things too, to say, how might that be affecting, let's say, the leisure and hospitality industry on the coast. So, there's a wealth of information that we're trying to track to get a greater understanding of what's happening amidst such uncertainty in the economy.
MICHAEL DUNNE: She's the state employment economist at the Oregon Employment Department. Gail Krumenauer, thank you so much for spending some time with us and talking about this important issue.
GAIL KRUMENAUER: Thank you.
MICHAEL DUNNE: That's the show for today. All episodes of Oregon On The Record are available as a podcast at KLCC.org.
I wanted to take this opportunity to read some listener comments on a couple of past shows. We brought you an episode recently about the dysfunction at the Lane Community College Board. Here are a few comments. John said, “I heard the interview today about the dysfunction of the LCC board. Nice work. I hope you continue to report on this story. LCC is an important institution, and it needs a board that works together. It looks like a lot of the problems stem from four board members who want to micromanage the college, which is not the board's role.” And Eric said, “it's a good summary of the unhappy, to put it mildly, state of affairs at the LCC Board of Education. And Steph wrote, “Eugene is almost completely devoid of good leaders.” We also got a comment regarding our recent interview with Senator Ron Wyden. Ron commented that, “Senator, we are trillions in debt. What is your solution? Where do we cut?” Keep sending in your comments to our Facebook, Bluesky or Instagram pages or email us at questions@klcc.org. Tomorrow on the show, you'll hear from an OSU robotics professor about their work to train four legged robots for missions to Mars. I'm Michael Dunne, and this has been Oregon On The Record from KLCC. Thanks for listening.
