Oregon’s unemployment rate fell to 3.6% in May from 3.7% in April, touching its lowest rate in more than two years, a positive sign in an economy struggling with runaway inflation.
May’s unemployment rate is just above Oregon’s record high of 3.4% set in November 2019, the Oregon Department of Employment said. It matched the US unemployment rate, which also hit 3.6% in May.
Low unemployment is often accompanied by high inflation as employers offer higher wages to attract scarce talent. With more money in their pockets, workers drive up the prices of goods, which leads to higher prices. The oil boom, caused by a boycott of Russian supplies, is also driving up prices.
In another bright spot, Oregon’s labor force participation rate rose to 63.5%, its highest level in 10 years. It has been rising rapidly since hitting a low of 59.2% in April 2020, when Covid shut down businesses of all kinds.
Oregon’s economy added 6,200 jobs in May, following average job gains of 6,000 in the previous six months. May gains were strongest in leisure and hospitality (3,200 jobs); transportation, storage and utilities (1,300); wholesale trade (900); and manufacturing (800).
Construction, down 1,100, was the only major industry that lost a large number of jobs.
Many economists predict the scorching labor market will cool as the Federal Reserve raises interest rates in an attempt to tame inflation. Higher rates make it more expensive to borrow money for big-ticket items like houses and cars, dampening demand for those goods. Home equity lines of credit, often used to buy things like flat-screen TVs and sofa sets, are also becoming less tempting sources of cash.