SALEM, Ore. – Oregon’s annual job growth turned negative in 2025 as employers cut payrolls and unemployment climbed to its highest level in a decade outside of a recession.
According to the Oregon Employment Department, nonfarm payroll employment declined by 3,300 jobs, a decrease of 0.2%, marking the first annual job loss since the pandemic recovery and one of only a handful of annual declines since 1990 that were not tied to a recession. While a few sectors added jobs, gains were narrowly concentrated in health care and social assistance.
The state’s labor force continued to grow modestly, but all of the increase came from a rising number of unemployed workers rather than employment growth.
More information from the Oregon Employment Department:
Job losses widespread despite concentrated gains
Health care and social assistance accounted for the majority of job gains in 2025, adding 13,300 jobs, or 4.4%, from the previous year. Government employment also increased, with public-sector payrolls growing by 3,300 jobs, or 1.0%. About three-quarters of those gains occurred in local government, including public schools, higher education and municipal services.
Most other major sectors experienced job losses. Manufacturing shed 6,900 jobs, a decline of 3.7%, while retail trade lost 3,100 jobs, or 1.5%. Wholesale trade employment fell by 2,200 jobs, administrative and waste services declined by 2,100, and the information sector dropped by 2,000 jobs, a decrease of 5.6%. All remaining sectors changed by fewer than 2,000 jobs over the year.
A diffusion index, which measures how broadly job growth is spread across sectors, showed more industries losing jobs than gaining them throughout 2025. The index remained well below 50 for most of the year, indicating contraction across much of the economy, though conditions improved modestly toward year’s end.
Health care leads for third straight year
Health care and social assistance led job growth for the third consecutive year, driven by gains across all major subsectors. Nursing and residential care facilities posted the largest increase, adding 3,900 jobs, or 6.9%, bringing total employment in the subsector to about 60,500.
Private social assistance employers also added 3,900 jobs, a 4.9% increase, while ambulatory health care services grew by 3,200 jobs, or 3.1%. Private hospitals added an average of 2,200 jobs in 2025, a gain of 3.5%.
Rising unemployment drives labor force growth
Oregon’s labor force grew by 20,200 people in 2025, an increase of 0.9%, consistent with gains seen since 2022. Unlike the pre-pandemic years, however, employment did not rise alongside labor force growth.
Instead, the number of employed Oregonians was essentially unchanged, while unemployment increased by 20,200 over the year. On average, there were 10,000 more unemployed workers in 2025 than in 2024, a 22% increase and the second consecutive annual rise.
After two years of stagnant job growth and rising joblessness, Oregon’s unemployment rate averaged 5.1% in 2025, the highest level since 2015 outside of a recession or recovery period.
Slow rebound forecast for 2026
Looking ahead, the Oregon Office of Economic Analysis projects a return to modest job growth in 2026. Employers are expected to add about 10,000 nonfarm jobs, a growth rate of 0.5%, or roughly 800 jobs per month.
Professional and business services are forecast to lead gains, followed by health care and social assistance. Job losses are expected in government, parts of manufacturing, financial activities and the information sector.
While growth is projected to resume, analysts say employment gains are likely to remain below historical averages.
Grant McHill
Source link