Today, the Oregon Office of Economic Analysis released its latest quarterly economic and revenue forecast.
Josh Lehner, senior economist at the OOEA reports on some of the findings in the latest blog, including indications that point to another recession before decade’s end.
This economic expansion just celebrated its sixth birthday. In true-to-form fashion, the party included decent-but-not-great job gains and steady-but-subdued GDP growth. As such there are few signs from the U.S. economy that the expansion is about to end anytime soon, even if growth has been lackluster overall following the financial crisis. However, all expansions do end and the economy is more likely closer to its next recession than not. This is especially true as storm clouds are gathering offshore in the form of a stronger U.S. dollar, weaker global growth and a significant and potentially worrisome slowdown in China.
The Oregon economy is at full-throttle growth. Jobs and income are increasing as fast, if not faster than during the mid-2000s. Given demographic trends, such rates of growth are considered full-throttle. As in past expansions, Oregon has regained its traditional growth advantage relative to other states. Much of this advantage can be attributed to the state’s industrial structure and strong in-migration flows. More important are the indications that Oregon is seeing a deeper labor market recovery. Wages for the average Oregon worker are increasing quicker than in the typical state, and above the rate of inflation.
While growth rates, and the trajectory of the economy have improved considerably, Oregon is not yet fully healed from the Great Recession. The largest economic concern today is the participation gap – the difference between the share of the population with a job or looking for work and what the rate would be when operating at full strength. The improving economy is and will pull workers back into the labor force, helping to support future economic growth at the same time.