What Resilient Means in Economic Terms

Over the last year (from August ’25 to August ’26) Salem’s employment growth slowed but was still positive. Oregon lost jobs and the U.S. employment level was just barely positive. (see table below)

Turning to trends in specific industries – transportation and warehousing, and health care and social assistance have been the standouts in terms of employment growth. (See graph below)

Salem’s transportation and warehousing industry employment grew healthily before and after the pandemic, due to increased on-line shopping and Salem’s proximity to Interstate 5. Industry employment then was given an additional boost several years ago with the opening of an Amazon facility off I-5 in Woodburn, which added several thousand jobs.

The only other industry experiencing employment growth since 2023 is health care and social services, mostly the result of an aging population. This is the case in the Salem area (16% growth), Oregon (14%) and the U.S. (13%).
State government employment, at 23,800 employees, is noteworthy as it comprises a large portion of Salem’s employment (13%). Over the last 25 years, it has grown slowly (16%) compared to total employment (34%). The combination of its size and employment stability over many business cycles has been a plus for the Salem economy.

Now for the industry losses.

Manufacturing job losses have been the norm in the U.S. for decades, and Oregon and the Salem MSA have been no exception. However, the Salem area’s recent manufacturing employment losses weren’t as large as those statewide. This is because the industry in Salem is diversified, comprising both large and small food manufacturers, and a wide variety of durable goods manufacturers.

30% of manufacturing employment in the Portland area is in computer products, and the large manufacturing job losses reflected in statewide numbers were in the Portland area, specifically, in Washington County’s chip industry. According to a recent Oregonian article, employment in this industry is at a 30-year low, and more layoffs are planned.

The construction industry, a smaller portion of Salem’s employment at 7%, has been losing jobs over the last year. This is the case in most other areas of the state, and for our northern neighbor the state of Washington as well. (see table below)

Construction is an important industry, not the least for the fact that its jobs by and large pay well. The median wage for all construction occupations is $30.51 hourly, compared to the median for all occupations at $26.02. And more highly skilled construction jobs pay more – heavy equipment operators make a median wage of $35.88 an hour, and electricians, nearly $50 an hour, according to the latest Oregon Employment Department’s Mid-Valley wage survey.

In fact, teaching teens construction skills as a path to employment has for years been a part of the youth programs of the Willamette Workforce Partnership (the local workforce development board and sponsor of this column). The latest project involved Yamhill County youth program participants, in partnership with a local contractor and the city of Carlton, building sidewalks for Carlton residents.

Normally construction employment declines during recessions. We aren’t in a recession and job losses over the last several years have other causes.

One cause is federal immigration policy. Recently the chief economist of the national Association of General Contractors described the situation: “For the first time since April 2024, construction employment slipped in a majority of states as aggressive deportation measures and a tightening of legal immigration have made it harder to fill construction job openings.” High interest rates are also having an effect on construction employment.

Lastly, the two remaining large industries by employment, retail trade and leisure and hospitality, continued to shed jobs in the Salem area and state-wide by fairly similar percentages.

Turning to unemployment, several interesting details stand out. The first is that over the last several months, the unemployment rate for men and for women has diverged, with women having a higher rate. In July in Oregon, women’s unemployment rate was 5.7% and men’s 4.8%. This is puzzling considering the substantial growth in health care employment – the health care industry’s employees are 78% female.

However, this divergence may be temporary, as the national employment gains in August of 162,000 jobs comprised mostly women, according to sources analyzing the Bureau of Labor Statistic’s numbers.

There’s another puzzling aspect about the unemployment rate. Normally when employment is declining – which it is statewide and has been steadily – the unemployment rate increases. So, why is the unemployment rate remaining relatively unchanged while job losses occur?

A possible explanation is that labor force participation is falling. Recall that the definition of the unemployment rate is the ratio of those unemployed and actively looking for work, divided by the labor force, which is the unemployed and the employed added together.

The labor force participation information published by the federal Bureau of Labor Statistics shows declining rates for Oregon and the U.S. over the last few months. (see graph below)

They haven’t fallen by much, but it may be enough to prevent the unemployment rate from increasing. Note that we don’t have the information for Salem, as the size of the sample (all current employment and unemployment statistics are from samples) would be too small to draw any valid conclusions.

What does all this mean?

The choice of the adjective “resilient” to describe the current economy – its core meaning “being adaptable to change” – seems apt. The economy has withstood the “stiff headwinds” of tariffs and high gas prices, say the economists of the Office of Economic Analysis. They also describe the labor market this way: ““The persistent job losses, alongside the unchanged unemployment rate, indicate that the labor market may be transitioning to a lower underlying growth rate.” (from the August 26th Revenue Forecast, page 14).

In other words, because of immigration policy, an overall slowdown of population growth, and an aging population, slower job growth may be the new normal.

Whether or not this state of affairs will continue, and whether or not the economy will react resiliently to further shocks – which could include more repercussions from the ongoing war in Iran, continuation of tariffs, and cuts to Medicaid and food stamps – only time will tell.

Pam Ferrara of the Willamette Workforce Partnership continues a regular column examining local economic issues. She may be contacted at [email protected].