Will Oregon's Economic Slump End?

Oregon, like the rest of the country, is stuck with a stubbornly slow economic growth rate, said state economists during August's revenue forecast, and it's behind the national curve for recovery. But there are some bright spots that hint at an end to the slump.

Growing slowly

Oregon's unemployment rate by region, July 2011 (Office of Economic Analysis)Oregon experienced its third straight quarter of job growth, the longest growth streak since 2007. The bad news is the rate of growth is tiny – just 0.7 percent in the second quarter. Normal job growth is almost twice that rate.

The bad economy has caught up with the public sector, which employs around 18 percent of Oregon's workforce. According to the Office of Economic Analysis, budget shortfalls in the last few years are now converting to layoffs, especially in local government and education. That's  put a drag on overall job growth in the near term.

The other major factor affecting job growth is the continuing failure of the housing market, according to economists.

Other economic factors help to paint a bleak picture. In the first half of 2011, estimated GDP growth was 0.8 percent.  Personal income growth in June was only 0.1 percent and consumer spending fell 0.2 percent.  Chief Economist Mark McMullen told legislators Oregon's economy could suffer as consumer pessimism from the East Coast moves westward.

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Revenue Forecasts Show Less State Income

Late last month, state economists confessed to Oregon's legislature that their predictions about the amount of tax revenue collected by the state were too optimistic, and in fact, the state would collect about $377 million less than they had forecast in June.

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