[there isn't a thread for Oregon's economy in here, so I thought I'd start one.]
About that recession? It's avoidable, it seems
New and more complete figures of jobs and manufacturing paint a far more optimistic picture of Oregon's economy than projected last week
Tuesday, December 18, 2007
Last week, an Oregon economist said recession appeared imminent. This week, state economists said Oregon is adding jobs, manufacturing is up and a recession seems avoidable.
Oh, and by the way, that October decline in the state's payroll employment they told us about? Never happened. Actually, October's seasonally adjusted nonfarm employment increased.
Plus, November's gain of 7,500 jobs, on a seasonally adjusted basis, was the biggest since December 2005, state labor economists said in a monthly report issued Monday. For the past 12 months, employment in Oregon also has increased 1.4 percent, compared with the nation's 1.1 percent.
"It really changes our view," said David Cooke, an Oregon Employment Department economist. The October-November growth, he said, "indicates that there's been substantial economic strength in those two months in Oregon's economy."
So is recession heading our way, or not? And why can't economists get their numbers straight and agree?
Timothy Duy, the University of Oregon economist who issued last week's recession warning, said the contrasting views result from a state economy that hangs in the balance -- with seasonally adjusted unemployment flat at 5.5 percent in November.
"We're at this inflection point," Duy said. "Maybe in fact we're going to pull out of this soft patch without any problem."
Economists weigh clues differently to make judgments. Whereas the labor economists look back in time, Duy uses an index of indicators to see ahead.
But even forecasters disagree.
Dae Baek, Oregon's acting state economist, sees a more positive picture in the data he uses. Despite recent gloomy headlines, he said, the new numbers confirm that the state is on track for some growth in 2008. October's faulty numbers stemmed from the Employment Department having to submit figures to federal officials before all monthly government-hiring results came in.
"Our economy is fundamentally sound," Baek said. "Consumers in Oregon are alive and well. Manufacturing actually has stabilized, I think in large part due to strong demand from the global economy."
One way of testing these theories is to visit a factory floor at, say, Climax Portable Machine Tools Inc., which makes lathes, hydraulic drills, flange facers and other gear in Newberg. There, Geoff Gilmore, president and chief executive, can't hire machinists fast enough -- for as much as $60,000 a year, plus benefits and overtime -- to fill orders.
"I know our company is not going into recession," Gilmore said. "We have a backlog like you wouldn't believe."
Privately held Climax, with sales from $25 million to $35 million a year, has hired more than 50 people since June 2006, said Joni George, chief cultural officer. With 138 employees, the company has 25 openings for positions ranging from high-school work study to senior machinists.
"If you'd told me five years ago that I'd be hiring machinists from the state of Wyoming and relocating them here," Gilmore said, "that's unbelievable."
One big driver for Climax is exports, which have grown from 10 percent of the company's sales eight years ago to 30 percent today. Gilmore expects foreign sales to near 50 percent in two years as Germany, China and South Korea snap up portable machine tools.
Statewide, booming exports have helped propel a rebound in manufacturing employment, which surged by 3,200 jobs between June and November to reach 203,800 on a seasonally adjusted basis. The weak dollar helps Oregon's sales abroad by reducing prices of U.S. goods in foreign currencies.
Other sectors also gained in November. Trade, transportation and utilities added 7,700 jobs when a gain of 5,000 is the seasonal pattern. Government hiring increased, as did educational and health services.
With November's jump of 7,500 jobs on a seasonally adjusted basis, payroll employment reached 1,737,900. Instead of dropping by 1,400 in October as originally reported, employment gained 3,200 that month. The main reasons were upward revisions of 2,200 jobs in local government education and 1,000 in state government.
Construction lost jobs but remained above the seasonally adjusted 100,000 that it hasn't undershot since early 2006. In November, 102,379 Oregonians were unemployed, compared with 99,001 in November last year.
"The moderately strong job showing in October, followed by the strong gain in November, put Oregon's payroll employment up by 24,300 over the past 12 months," said Monday's Employment Department report. "This is a gain of 1.4 percent."
Baek, the acting state economist, acknowledged economic damage from the national housing crisis and overall slower growth. "But," he said, "let's stop downtalking our economy."
Richard Read: 503-294-5135; email@example.com