Oregon jobless rate rises sharply last month

SALEM — Oregon's unemployment rate took a sharp jump in October with major industries shedding more than 14,000 jobs as the nation's financial woes deepened.

Oregon's seasonally adjusted jobless rate jumped from 6.4 percent in September to 7.3 percent last month, the highest jobless rate since August 2004 and well above the national average of 6.5 percent.

"We've seen the unemployment rate drifting up this year. October was an intensification of that trend," said Art Ayre, a state employment economist.

There are predictions that things could get worse before improving.

"Its horrible," said Tom Potiowsky, the state economist. "The speed at which this economy is going down is just very surprising," he told The Oregonian.

Potiowsky, who issues his official state revenue forecast Wednesday, expects the state unemployment rate to reach or exceed 8 percent before this recession is over. "We really aren't going to see better growth until 2010. Oregon will suffer more than Washington," he predicted.

Last month's unemployment rate translated to 134,096 Oregonians on the jobless rolls — an increase of more than 40,000 over this time a year ago.

The job losses were spread across most major industries.

— Manufacturing cut 5,000 jobs at a time of year when a loss of only 500 is expected.

— Transportation equipment manufacturing cut 1,500 jobs.

— Computer and electronic product manufacturing cut 1,200 jobs and is down 3,100 jobs since October 2007.

— In a key sector, construction employment shrank again in October, dropping 2,000 for the month, more than double the typical seasonal decline of 900.

Construction employment has been on a steady decline since July 2007, when employment stood at 105,800. Since then, construction is down 13,900 jobs or 13.1 percent.

The state's widespread job losses have retailers bracing for a lackluster holiday shopping season that could result in reduced hiring of part-time workers at stores and malls, said Ayre, the employment economist.

In recent years it's been common for retailers to add a net 10,000 workers statewide from September through December, he said, "but this year it's likely to be lower, possibly around 5,000."

The state's political leaders are watching employment trends, too, for further signs of a worsening economy that could result in a continuing drop in tax revenue to fund state services and programs.

"It is critical the Legislature do all it can to protect the human services safety net on which more Oregonians will need to depend — things like food stamps, aid to needy families and health care for children," Senate President Peter Courtney said after Monday's jobs report.

Despite tax breaks and other incentives aimed at attracting wind and solar manufacturers to Oregon, the growth in that sector has not offset the loss of other manufacturing jobs.

Still, Democratic Gov. Ted Kulongoski said Monday's jobless figures are a "call to action" for the state to keep investing in renewable energy and other sectors that can create jobs for the future.

He again called on lawmakers to approve his $1 billion transportation package, which includes a 2-cent-a-gallon gas tax increase, to help pay for road and bridge improvements and create thousands of family wage jobs.

The public works issue is likely to spark heated debate in 2009 Legislature, however. House Republican Leader Bruce Hanna, noting the big jump in the jobless rate, warned that "reckless pork barrel spending alone will not fix Oregon's economic crisis."

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