Nada

Oregon's March unemployment rate was essentially unchanged at 8.6% on a seasonally adjusted loss of 300 jobs.

Blah.

Oregon's Employment Recovery Hits Bump in Road

The Oregon February employment numbers are out and the news is depressing: Oregon lost a seasonally adjusted 6,400 jobs and the unemployment rate held steady at 8.8%.

Still, the trend over the last few months has been positive and I suspect that this will be a temporary aberration as the health of the US economy is getting stronger.  But this exposes a lot of the underlying weakness of the US revovery: while we are in positive feedback loop of increasing demand and increasing employment in general, there is no obvious driver of growth at the moment other than pent-up demand which may not be that strong or that lasting.

Oregon January Unemployment Falls to 8.8% on 5,400 New Jobs

The Oregon January unemployment numbers are out and the news is good, mirroring the US unemployment picture we gout a couple of weeks ago.

The state added 5,400 jobs on a seasonally adjusted basis with gains in most industries but a dip in construction.  The increase in the rate was from a combination of these new jobs and from another 8,800 dropping out of the Oregon labor force. This drop out could be due to migration out of the state, discourages job seekers that have stopped looking for work, folks going back to school, etc.

As the two graphs above show, we still have a heck of a long way to go to get back to pre-recession levels of unemployment and employed persons in Oregon, but at least now we appear to be solidly on the right track.

NOTE: Josh cautions me that I am using non-seasonably adjusted labor force numbers (the 8,800) along with the SA jobs numbers.  Tisk-tisk.  He thinks the SA number is porbably more like 1,500 fewer in the labor force.  Go check out his much more detailed post.

He also has a great post on Oregon demographic trends that I was going to try and steal a part of, but I am just too busy, so go read it yourself.

Oregon's Budget Shortfall, Part...what...26?

OPB has the story this morning of the Oregon Legislature first officially mandated annual session where the first order of business will likely be yet another round of cuts coming from revenues that have not kept up with last years projections.

Which got me to thinking, two years ago voters in Oregon approved a measure that included a temporary tax increase to 10.8 on individual income above $125,000 and 11% on income above $250,000.  Those increases were to both roll back to a new permanent 9.9% bracket on anything above $125,000 in 2012.  This means that the part of the state's revenue shortfall is coming from the tax roll-back.

Michelle Cole of The Oregonian had this story last month (which I missed at the time):

The drop in the tax rates for an estimated 35,000 high-income households is part of a controversial policy passed by the Legislature and approved by voters in the 2010 election. At the time, everyone agreed that the 10.8 and 11 percent income tax rates contained in Measure 66 would only be a temporary solution to help balance the state budget.

On Jan. 1, the tax rate drops to 9.9 percent for individuals who earn more than $125,000 or joint filers with incomes in excess of $250,000. That top rate is still higher than the 9 percent it was before Measure 66. But the change means state government is projected to receive about $118 million less during the current, two-year budget period.

So there is the answer I was looking for: the tax roll-back will cost the state about $118 million in revenue. Which, in a sense, is neither here nor there - the budget projections last year included this as it was anticipated and still lawmakers are anticipating a $50 to $80 million dollar shortfall.

But perhaps this will provide I little stimulus? Sadly I suspect that it will provide almost none, for the difference between this and, say, a payroll tax cut is the fact that the marginal propensity to consume from this income is very low. We would not expect this extra money to be spend, but rather saved or invested - neither of which is a big help at a time when capital is not being used for investment because of the lack of aggregate demand not because there is no cash around.

Oregon Ranked #13th Best in Business Tax Climate

The Tax Foundation has released its latest Business Tax Climate rankings and once again, Oregon comes out looking pretty good.  The Tax Foundation considers Oregon to be the 13th best in the country, an improvement of two spots from its 2011 ranking.

According to their metrics, Oregon does particularly well in sales tax and property tax, but a little worse in in corporate, individual and unemployment insurance taxes.

Child Well-Being in Oregon

The Foundation for Child Development and the Annie E. Casey Foundation have compiled a host of measures of child well-being and use them to rank states.  They have produced a report about these metrics, but here is their map showing the relative position of states according to their metrics.  Nancy Folbre has an interesting discussion of these at The New York Times' Economix blog as well which centers on the willingness of states' residents to pay taxes for services for children.

Oregon ranks 31st in this - slightly below the average of the 50 states.  Interestingly, from this report using much of the same data we find that Oregon does well in health measures: infant mortality, birth weight and child and teen death rates.  Where we start to fall are in the areas of education, employment and poverty.

The metrics are shown below so you can decide how meaningful they are.

Oregon Unemployment Drops to 9.1% in November

Oregon's November unemployment rate dropped to 9.1% in November, but the number of employed dropped by 1,600 on a seasonally adjusted basis.  Similar to the national data the drop in the rate of unemployment is due to the number of people who exited the labor force by no longer looking for work.  That number declined by almost 7,000 people.  So there is not a lot to cheer.  Especially noteworthy was the 2,300 decline in manufacturing jobs.

State Tax Revenues on the Rise

Or so says the Rockefeller Institute who tracks state tax revenue from 48 states:

Preliminary tax collection data for the July-September quarter of 2011 show growth in overall state tax collections, as well as for personal income tax and sales tax revenue, for the seventh consecutive quarter. While still strong, revenue growth was more moderate than in the previous three quarters. We will provide a full report on the July-September period after Census Bureau data for the quarter are available.

The Rockefeller Institute's compilation of data from 48 early reporting states shows collections from major tax sources increased by 7.3 percent in nominal terms in the third quarter of 2011 compared to the same quarter of 2010. This is a noticeable slowdown from the 10.8 percent year-over-year growth reported in the second quarter of 2011. Tax collections now have been rising for seven straight quarters, following the five quarters of declines that were brought on by the Great Recession.

Here are the data for Oregon and Washington (PIT=Personal Income Tax; CIT=Corp. Inc. Tax; Sales=Sales Tax):

Percent Change in State Tax Revenue, July-September 2010 to 2011

Fortunately for Oregon personal income taxes in general are recovering faster than are sales taxes as people are probably using new income to pay down debt and build up savings (though the saving rate has begun to dip again, so sales taxes will probably pick up soon).  Overall a 10.4% increase is a nice healthy rebound for Oregon and from what I understand, above both of the two most recent forecasts for Oregon.  This from the OEA blog:

Let's hope the trend continues.  If the Euro mess can get sorted (and today there is good news on that front), this fledgling US recovery might just start to gain some momentum.

Trade and Oregon

From the Office of the US Trade Representative:

Oregon

Exports Support Jobs for Oregon Workers

Export-supported jobs linked to manufacturing account for an estimated 5.2 percent of Oregon's total private-sector employment. Nearly one-quarter (23.5 percent) of all manufacturing workers in Oregon depend on exports for their jobs (2009 data latest available).

Exports Sustain Thousands of Oregon Businesses

A total of 4,918 companies exported goods from Oregon locations in 2008. Of those, 4,384 companies, or 89 percent, were small and medium-sized enterprises (SMEs), with fewer than 500 employees.

SMEs generated close to one-third (32 percent) of Oregon's total exports of merchandise in 2008.

Foreign Investment Creates Jobs in Oregon

In 2008, foreign-controlled companies employed 46,900 Oregon workers. Major sources of foreign investment in Oregon in 2008 included Germany, the United Kingdom, Japan, and Canada.

Foreign investment in Oregon was responsible for 3.2 percent of the state's total private-industry employment in 2008.

Oregon Depends on World Markets

Oregon's export shipments of merchandise in 2010 totaled $17.7 billion.

The state's largest market was China. Oregon posted merchandise exports of $4.0 billion to China in 2010, 23 percent of the state’s total merchandise exports. China was followed by Malaysia ($2.7 billion), Canada ($2.4 billion), Japan ($1.4 billion), and Korea ($937 million).

The state's largest merchandise export category is computers and electronic products, which accounted for $7.8 billion of Oregon's total merchandise exports in 2010. Other top merchandise exports are agricultural products ($2.3 billion), machinery manufactures ($1.5 billion), chemicals manufactures ($1.4 billion), and transportation equipment ($827 million).

Oregon's Metropolitan Exports

In 2009, the metropolitan area of Salem exported $325 million in merchandise. Other major metropolitan areas in Oregon that exported in 2009 included Eugene-Springfield ($314 million) and Corvallis ($241 million). A major metropolitan area exporter that included some counties of Oregon was Portland-Vancouver-Beaverton (including some counties in Washington as well) which exported $15.5 billion in merchandise in 2009.

*Data updated June 2011, by the Office of Trade and Industry Information, International Trade Administration, U.S. Department of Commerce.

Now, keep in mind this is from a source that is charged with promoting trade, but most of the facts are straightforward. Now you know.

A Mileage Tax or a Gas Tax?

Our fair Governor has proposed a mileage tax on top of a gas tax hike to address the lacuna in transportation funding.  This raises the question of which is better and what do they accomplish.

If you are proposing Pigovian taxes, then both make sense but address very different things.  Driving a car imposes external costs through the impact on the environment, through the wear and tear on the roads and through the time cost of congestion.

A mileage tax addresses the wear and tear issue.  People who drive will be assessed a tax that is equivalent to the cost of the road wear they are responsible for.  This has the benefit of being fair and providing a direct source of funds to maintain the roads and is a disincentive to drive once the external cost is made internal through the tax (and also taking into account the cars weight, etc. - of course how will they deal with studded tires and chains?).  The implementation is costly however, having a GPS in each car has got to be expensive as well as the cost of reading them and imposing a tax.  Perhaps we could just do a mileage charge - not as accurate but simple.

The mileage tax does not address the congestion issue, but with the GPS it could, one assumes.  If you drive on certain congested roads at certain rush-hour times, you could be charged more. This would provide the same Pigovian incentives to avoid driving during rush-hour or in congested areas.   The GPS could also determine how much tax should go to municipalities, counties, and the state depending on which roads you drove on.  But doing these things would seem to be an enormous computing challenge and one that would be enormously expensive.  It is an interesting idea, however.

The gas tax is Pigovian in addressing the environmental impact of the amount of carbon emitted which is exactly related to the gas used.  If the primary goal is to address this than this is the appropriate tax.  

It is clear that each tax is also a poor way to address the other issue, to wit: a gas tax is not a good way to address wear and tear because a Prius could do a lot of wear and tear with little gas and a Mustang could do little wear and tear with a lot of gas; and a mileage tax doesn't work, for the very same reason, as a way to address environmental impact.

Both taxes could be implemented, but since the gas tax is good for the environmental impact side and, though imperfectly, does address the wear and tear side as well, and is basically zero extra administrative cost, it seems like the clear winner.  However, if the GPS system could be done very cheaply and has the added congestion and differential tax components, it might be worth pursuing.  Perhaps it is politics but I don't see what's wrong with a healthy increase in the gas tax - besides the GPS monitors will just serve as a constant reminder of the government's taxation which will fuel the anti-tax sentiment latent in almost everyone.

Note: One thing I failed to mention is that the milage tax is imperfect in that non-Oregon registered cars that drive in Oregon (for example, Vancouver commuters) would get off scott-free.  At least a simple gas tax would catch some of them and would work both ways (Oregon drivers in Washington would pay for Washington's roads only when they buy gas in Washington).

Oregon Unemployment 9.5% in July

The new employment numbers are out the and news is dismal.  The unemployment rate is still stuck at 9.5% with only 300 new jobs added on a seasonally adjusted basis.  This means that the Oregon economy has added a total of 400 jobs since February.  Oregon's experience is essentially the same as the national trends which signals a stalled recovery.

Oregon Unemployment 9.4% in June

A little late on this today as I was otherwise occupied until now, but the Oregon employment picture looks a lot like the national one which is essentially stuck in neutral (oh, how many metaphors am I going to have to use?).  The unemployment rate is basically the same at 9.4% but the real information is in the jobs number which is at plus 800 for June.    As the employment department report notes, the Oregon economy has essentially added no net jobs since February. Ouch. The nice gains in private sector job growth in professional and business services (+1,200 jobs), educational and health services (+2,200), and leisure and hospitality (+4,400), were counter weighted by losses in government (‐2,900 jobs), manufacturing (‐2,000), and trade, transportation and utilities (‐1,800). The government number shows the anti-stimulus effects of state government cutting sharply right when the economy is trying to get a little momentum.

It is a little tiring trying to think of something new to say each month as each month is the same basic story: tiny glimmers of a recovery, but not enough to provide any light.

Oregon Unemployment Falls to 9.6% in April

The Oregon unemployment rate fell to 9.6% in April, down from a revised March figure of 9.9%.  Note that this puts Oregon just a shade above the national rate of 9%.  In addition Oregon added 1,600 jobs in April after a loss of 2000 in March.

UPDATE: A commentator asks about the underemployment rate.  Here are all the various definitions and their Oregon estimates for April:

Underemployment as the term is generally used is the U6 measure and includes those that want to work full time and cannot, those that do not have regular employment, etc.  For Oregon is is estimated to be 18.4% in April as compared to the US which was at 15.9% for April.

The May Oregon Revenue Forecast

About what I expected: slightly better but no tidal wave of new revenue to save the state.  The new forecast predicts an additional $128 million for the next biennium.  Always nice to have more, but realistically, this is hardly enough to make a real difference. It is clear that this is going to be a long and slow recovery and it will take time to recover the lost revenues.  In the meantime public school districts are resorting to draconian measures to further diminish what already is an embarrassment of a public education system.

Anyway here are a couple of pictures from the presentation to the legislature this morning.

The first is the graph of Personal Income Tax Collections presented as a % change from one year ago (3 month moving sum):

The second is revenue growth relative to the March forecast - corporate is doing better than forecast but personal is doing worse:

In the mean time lawmakers will haver another $40 million plus hole to fill before the end of the current fiscal year.

A Look at Oregon's Economy from the OEA

I have been very busy lately as you can see by the length of my posts.  But I have been quite remiss in not directing readers over to Josh Lehner's always excellent posts at the Oregon Office of Economic Analysis.

Here are three recent posts that are well worth a read:

First, it turns out he beat me to a post on the international GDP comparisons - his is much better. Not strictly an Oregon economic issue, but as Oregon is in the US it does correlate.

Second, there is this post and a follow-up on Oregon's relative performance on jobs.  In the graph below Oregon is red, Washington is blue and the US average is black.

Third, there is an update on the Oregon Index of Leading Indicators.

I'll be talking about some of this tonight on KGW's "Live @ 7" show.  

Oregon February Unemployment Falls to 10.2% on Strong Jobs Growth

The February numbers are out and Oregon's jobs picture looks much better, though not enough to disabuse me of the belief that though we are indeed in recovery mode, it is still going to be a climb out.

The unemployment rate is still at a quite high 10.2%, but the number of new jobs created was a very robust 9,800 on a seasonally adjusted basis. This is the highest monthly jobs gain in Oregon since November 1996. The unemployment rate is of course a function of supply and demand and the supply of those looking for jobs in increasing with demand so it'll be hard to make a serious dent in it quickly, but the jobs numbers have been good for 5 months now, and it is this number that is the important one upon which to focus.  Finally some very good news about the Oregon economy.

Here is a picture of the jobs numbers:

One reason to temper enthusiasm is the terrible catastrophe in Japan, which will not help matters as it is one of the top destinations for our exports and the Port of Portland still handles a number of cars and other goods going to and coming from Japan.  Here is a picture of Oregon Exports by Country from 1997 to 2010 taken from a post at the Office of Economic Analysis Blog.

Turmoil in the middle east and the related surge in oil prices is not helping speed the recovery either.  So the moral of the story is that things are getting better, but still slowly and we still have a long climb ahead.

Oregon Unemployment Still High in January: 10.4%

Some good news from Salem this morning, Oregon's unemployment rate fell to 10.4% in January.  Not really a significant change, but the better news is the robust job growth.  On a seasonally adjusted basis, 6,300 jobs were added in January, almost all of it private sector growth, after a revised 4,000 jobs added in December.  This is progress.  But before we get too giddy, here is a buzzkil:

We have only just begun to climb out of the hole the recession created. It is going to be a long slow climb...

Oregon December Unemployment: Still Stuck at 10.6%

The December Oregon unemployment figures were announced today and, as usual these days, they contain both good and bad news.  The bad news is that the unemployment rate is stuck at 10.6%, the good news is that for four months running now the state added private sector jobs.  Oregon added, on a seasonally adjusted basis, 400 private sector jobs in December, however government shed 2,200 jobs leaving the state with a net loss of 1,800 jobs.

The take away is the same as last month - the situation is improving but at a glacial pace.  The wave of budget crises in the states will continue to put the brakes on growth as spending cuts are made and jobs shed - which is severely hampering our ability to climb out of the hole we've created.

Oregon's Exports and Trade Weighted Exchange Rates

In the wake of my little post on Oregon's trade weighted dollar index, Josh Lehner at the Oregon Office of Economic Analysis' Blog discusses it in depth and points us to the index that his office keeps. Here is an excerpt:

Given Oregon’s industrial makeup (the state’s manufacturing location quotient for 2009 was 1.143, with durable goods registering a 1.309) and geographic location, the state has long been a major exporter and international trade is a pillar of the state’s economy. According to research, Oregon is the fifth most trade-dependent state in the U.S. and a recent Brookings Institute report (see page 15) shows that the Portland-Vancouver MSA is the second most trade-dependent metro in the country behind only Wichita, KS. (Wichita is the “Air Capital of the World” and has long been a major player in the aircraft industry with operations by Boeing, Airbus, Leerjet and Cessna, among others.) Seeing that exports play a major role in Oregon’s economy and international trade is influenced by exchange rates, tracking the international competitiveness of Oregon’s exports is important to determine the economic health of the state and also to help gauge future trends. It also stands to reason that for a trade-dependent state, such as Oregon, a dollar index is a leading indicator for local employment. As the dollar becomes more competitive, it will boost Oregon exports, which in turn will lead to increased employment as the exporting firms need to hire additional workers to fill orders and the ports will hire additional workers to load/unload the products onto ships, barges and airplanes.

Generally speaking, what the Dallas Fed is now undertaking follows the methodology of our office’s Oregon dollar index, however there are a few differences that lead to slightly different outcomes. First, the graph below illustrates our office’s Oregon dollar index and the Major Currency dollar index from the Federal Reserve over the past 15 years.

***

The fact that the Dallas Fed uses the Top 25 trading partner countries and our office uses just the Top 15 countries may seem like a potentially large difference, however, based on data over the past 15 years, it is not. On average, the Dallas Fed notes that their indexes cover 89 percent of all exports for each state. That means, the Top 25 trading partners account for 89 percent of each states’ exports. In Oregon, the Top 15 trading partners account for an average of 84 percent of all exports and depending upon the year, the exact percentage falls within the 82-88 percent range. With such a small difference between using the Top 15 compared to the Top 25, the overall dollar index for the state would not be changed significantly.

Overall, the continued depreciation of the U.S. dollar and also the Oregon Dollar Index, is good news for exports (and manufacturers of export goods), which should continue to increase as the global expansion continues.

Go read the rest of the post there.

Oregon and World Exchange Rates

The Federal Reserve Bank of Dallas has issued a report that creates a real trade weighted value of the dollar for each state.  This is weighted by the specific countries where the state exports to and imports from and by how much they do so.  The point is that national exchange rate indices do not always give an accurate impression of how exchange rates are affecting individual states.  Oregon, for instance, trades relatively heavily with East Asia and relatively little with South America.

First, how important is trade for Oregon?  Well, the statistic I always cite is old, but the most recent we have and shows that in 2006, Oregon was the 5th highest state in terms of the importance of exports to jobs.

As for the importance of trade with East Asia, here is a look at how the East Asian crisis of the late 90s really impacted trade with Western states.

Which is why, of course, when people ask me about Oregon's economic prospects I always point to what is going on in East Asia, which right now is great for us.  But, of course, the prospects of a major real estate bubble, social tension and a manipulated Yuan are all worrisome.