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 that’s struggling with rampant inflation.
May’s unemployment rate is just above Oregon’s record low of 3.4%, set in November 2019, the Oregon Employment Department said. It matched the U.S. 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 bid up the price of goods, leading to a rise in prices. The surge in oil, caused by a boycott of Russian supplies, is also driving prices higher.
In another bright spot, Oregon’s labor force participation rate rose to 63.5%, its highest reading in 10 years. It has risen rapidly since bottoming at 59.2% in April 2020, when COVID closed businesses of all kinds.
The Oregon economy added 6,200 jobs in May, following gains averaging 6,000 jobs in the prior six months. May’s gains were largest in leisure and hospitality (3,200 jobs); transportation, warehousing and utilities (1,300); wholesale trade (900); and manufacturing (800).
Construction, down 1,100, was the only major industry that shed a large number of jobs.
Many economists are predicting the red-hot 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, easing demand for those goods. Home-equity lines of credit, often used to buy things like flat-screen televisions and sofa sets, also become less tempting sources of cash.