What unemployment numbers tell us about Salem’s economy
written by Pam Ferrara for the Salem Reporter
July 2025
Although the unemployment rate is one of the most reported measures of economic health (it was 4.5% in May in the Salem area), there’s a lot of detail behind that single number that isn’t widely known.
The detail is important as it helps us understand the workings of the labor market in the Salem area, Oregon, and the U.S. in the 21st century.
Put simply, when the rate is as low as it is now, many of the unemployed have challenges to landing a job, and employers have difficulty hiring for openings.
These challenges guide the work of the Willamette Workforce Partnership (WWP), the local workforce development board and the sponsor of this column, as we’ll see later in the article.
What are those challenges and what is being done to meet them?
First the basics: The unemployment rate is the number of unemployed individuals divided by the number of individuals in the labor force and expressed as a percentage. The unemployed are those individuals not working and actively looking for a job. And the labor force is the unemployed plus the employed.
The unemployed and employed are “working age” that is, aged 16 and older and are civilians not living in institutions. “Actively looking for a job” and “employed” is precisely defined.
Defined by whom? The federal Bureau of Labor Statistics (BLS) to be exact. This agency, in partnership with the Census Bureau, collects, compiles and publishes the information from a sample of individuals surveyed monthly.
The sample is large for the entire U.S., smaller for Oregon, and smaller still for the Salem Metropolitan Statistical Area (MSA, Marion and Polk counties combined). For the Salem MSA, and even for Oregon, the rate in any one month may be subject to the potential oddities of a small sample size. So, it’s best to observe the unemployment rate over several months to get an accurate picture of unemployment trends.
What have been the short- and long-term trends for Salem area unemployment? (see graph, next page)
Let’s start with the short-term. The unemployment rates in both the Salem area and Oregon have been increasing since January 2025, but only by less than half a percent over the last several months (from 4.3% to 4.5%). The U.S. rate has wobbled back and forth between 4.1% and 4.2% – nothing dramatic here.
The longer-term story, because of the pandemic, is dramatic. After hitting lows in the 3.5% range in late 2019, the unemployment rate soared to 12 percent in April 2020, then immediately began to decline. By April of 2021 it was 5.6%, and by April of 2022, 3.8%.
This means that, with the exception of the early months of the pandemic, we’ve seen nearly four years of low unemployment rates in the Salem area. This is the longest stretch of rates consistently below 5% since the 1990s.
This has consequences both for job seekers and employers, because the low rates mean that the economy has been at full employment for some time. Basically, anyone who wants a job has one.
However, even with a low unemployment rate, approximately 10,000 Salem area individuals were unemployed in May of 2025.
Why are these individuals unemployed? Approximately half were laid off from a job (and may be collecting unemployment insurance benefits if they meet the requirements).
The other half were unemployed for one or possibly both of the following reasons: they were new entrants to the labor force, and/or may have significant barriers to becoming employed.
The key to understanding these barriers is to analyze the unemployment rates by certain demographic factors. These rates vary considerably from the reported number.
(see table below)
| U.S. Unemployment Rate June 2025 by Selected Demographics* | |
|---|---|
| Educational Attainment | Unemployment Rate |
| Less than High School | 5.8% |
| High School Only | 4.0% |
| Some College, Associate’s | 3.2% |
| Bachelor’s or Higher | 2.5% |
| Age | |
| 16-19 | 14.4% |
| 20-24 | 8.2% |
| 25-54 | 3.3% |
| 55 and Older | 3.0% |
| Those with a Disability | 8.0% |
| *Overall Unemployment Rate: 4.1% Source: Current Population Survey, BLS |
|
Three of these factors are especially noteworthy and have shown the same pattern for decades: unemployment by educational attainment, age, and presence of a disability.
When the overall unemployment rate in the U.S. in June 2025 was 4.1%, it was 5.8% for those with less than a high school education, and 2.5% for those with a bachelor’s degree or higher. (Information is only for the U.S. because of the sample size issue as explained previously.)
Younger individuals aged 16-24 (likely to have little or no work experience) had unemployment rates two to three times as high as the overall. And individuals with disabilities had rates nearly twice as high. However, the current rate of 8% for individuals with disabilities is the one of the lowest since it first began to be measured.
The BLS also reports unemployment rates for men and women separately. These rates are usually similar but there have been two recent situations when that was not the case. In the Great Recession of 2008, men’s rates were higher than women’s as men tended to work in the industries hardest hit, manufacturing and construction. And early on in the pandemic women’s rates were higher, one reason being that women tended to work in the hardest hit industries, the largest being leisure and hospitality.
Unemployment rates by industry are also published, although there aren’t many differences when the rate is low. Briefly, the highest unemployment rates in June (for the U.S.) were in the retail trade industry (5.3%) and in leisure and hospitality (6.4%). One of the lowest rates by industry was for health care and social assistance, 2.6%.
What does all this mean for job seekers and employers?
It means that, when unemployment rates are low, job seekers are more likely to have barriers to becoming employed. These may include lack of education, lack of work experience and/or job skills, and problems with transportation, child care, housing, and having been incarcerated. And, to employers, it means having a more difficult time hiring for job openings.
This is where the workforce board comes in. Over the last several years of low unemployment rates, the board, in addition to its main function of job training, has been focusing on helping job seekers remove barriers to employment, and on helping area businesses skill up their current workforce.
For example, Willamette Workforce Partnership (WWP) awarded the Mid-Willamette Community Action Agency’s re-entry services program funds to provide welding training for formerly incarcerated individuals. WWP also funded area organizations to assist adults in custody to prepare for being released, and to support recently-released individuals to navigate the employment services of WorkSource Oregon, Oregon’s resource for local job seekers.
Additionally, the workforce board has funded several area nonprofits to assist employers with leadership and supervisory training for their current employees. This helps with employee retention and skill-building.
What about the future? Will unemployment rates stay low and the economy stable?
Here’s the bottom line, borrowed from the latest Oregon Revenue forecast: The economy looks solid.
And the latest information from the BLS shows a healthy employment and unemployment picture for the U.S. in June. The economy of Oregon and the Salem MSA normally follow the pattern.
However, again to borrow several phrases from the Revenue forecast, the future looks “uncertain”, due in large part to the U.S.’s “major public policy course changes.”
We’ll write again in early October, and the news should be interesting, so stay tuned!
Pam Ferrara of the Willamette Workforce Partnership continues a regular column examining local economic issues. She may be contacted at [email protected]
