The U.S. economic expansion turned 10 years old this summer, making it the longest expansion in recorded history. Locally, Oregon continues to add jobs and our unemployment rate remains at or near record lows. In addition, incomes are rising and initial claims for unemployment insurance (a measure of layoffs) are down. All told, the state’s economy continues to hit the sweet spot.
How long will this last? In their latest employment forecast, Oregon’s Office of Economic Analysis (OEA) asserts that expansions don’t die of old age. Instead, they’re usually snuffed out by bad behavior or policy mistakes. The Federal Reserve is currently adjusting monetary policy in an attempt to keep borrowing cheap, businesses and consumers confident, and the next recession at bay. The key question is whether they can successfully walk the tightrope of stimulating the economy without overheating it.
Several broad industries are projected to slowly over the next year. The manufacturing sector is flat heading into 2020, weighed down by trade issues and global risks. Construction also decelerates even as the housing rebound continues; growth rates topping 8 percent in recent years are simply unsustainable. The trade, transportation, and utilities sector settles down after the Amazon surge of the past few years which saw thousands of jobs created in the warehousing component.
Other industries will take up the slack. The public sector will outperform its recent past across most components: Local government will grow as revenues continue to improve in step with the economy, and the federal component will be bolstered by Census hiring. Private education and health services also accelerates, primarily due to the healthcare component as our population continues to grow and age. Professional and business services rebounds from its recent slump and outperforms all other broad industries.
Oregon’s forecasted growth depends on maintaining three major competitive advantages that have served us well in the past: our ability to attract and retain a skilled labor force; our industry structure; and a favorable climate for new business formation.
Press release provided from the State of Oregon, Employment Department.