Central Oregon 2020 Employment RevisionsMarch 10, 2021 At the end of each year the monthly employment estimates for Oregon’s counties are revised for the previous two years using payroll tax records. Most of the attention is paid to the most recent monthly estimates being released. However, these benchmark revisions are equally as important as it is an opportunity to review what actually occurred in the job market over the past year. And 2020 was a unique year.
For the past several years we have been revising employment on a quarterly basis as new payroll records are finalized. This quarterly benchmarking has allowed us to produce more accurate estimates with fewer major changes at the end of the year. The major revisions for this round of benchmarking were to the third quarter of 2020 (July, August, and September) as the first two quarters of the year had been revised previously. This was a critical period of the pandemic that saw significant job recovery after the initial lockdown. The payroll records revealed that we largely underestimated this period of recovery, particularly for Deschutes County.
Revisions to the employment situation showed that the initial job losses in April were more significant in Deschutes County than originally estimated. The county lost roughly 18% of total nonfarm employment compared with the original estimate of around 17%. Despite the plunge being deeper than originally estimated, the recovery was more robust. The county ended the year with employment down 6.7% from pre-COVID compared with the original estimate of an 8.3% loss. July was a particularly strong month of the recovery with Deschutes County adding 2,750 jobs. The original estimate was only a gain of 30 jobs. With these upward revisions, Deschutes County recovered nearly 64% of all jobs lost in the initial COVID-19 shock by the end of 2020.
There were less significant revisions in total nonfarm employment for Crook and Jefferson Counties. Crook County finished the year with employment down 3.6% from before the pandemic compared with the original estimate of a 3.7% loss. Jefferson County also finished with employment levels down 3.6%, which is little changed from the original estimates.
Across the whole region the largest revisions were in leisure and hospitality. This was particularly true for Deschutes County, where employment was revised up by around 1,000 jobs in the third quarter, roughly a 10% jump from the original estimates. There are a few reasons for this jump. First, employment losses in food services were overestimated as limited-service restaurants (fast food/ drive thru) largely avoided significant employment impacts. Tourism visitation was much stronger than many initially expected, leading to more travel spending in the region. Finally, federal programs tied to the CARES Act kept many workers on their employers’ payroll even though they may not have been working. The upward revisions are good news. However, leisure and hospitality employment still finished the year down roughly 3,000 jobs (-22%) compared with 2019.
Another major industry sector that saw significant revisions was private education and health services. The combination of online school and non-essential medical procedures being postponed for significant periods of time led to notable job losses for this sector. However, payroll records revealed that those losses were far less than first estimated. The sector finished the year with employment down by 350 jobs from 2019 in Deschutes County, a significant improvement from the original estimate that had the industry down by closer to 500 jobs.
Manufacturing followed a similar pattern with relatively large upward revisions to employment; however, the industry still finished the year down significantly from 2019. Manufacturing employment was revised up by nearly 500 jobs across Central Oregon, a 7% increase from the original estimates. Although the industry is sitting in a better position than originally estimated, employment levels finished the year down roughly 600 jobs (-8%) from levels before the pandemic.
One of the bright spots in the original estimates had been professional and business services that had been showing significant job gains through 2020. Those original estimates were revised down significantly with payroll records showing employment in 2020 was largely unchanged from 2019. One important note with this industry is that many of the folks who have the flexibility to telework fall under this sector. A telework job is not counted where the worker lives but where their payroll is cut. Bend and Central Oregon likely import far more teleworkers than we export. Based on the trends with work from home during the pandemic, it is likely that the professional workforce grew in 2020 despite employment in local businesses being largely unchanged.
These upward revisions provide a glimmer of optimism after a difficult year. The labor market is bouncing back quicker than originally thought. Help wanted ads, a leading indicator that foreshadows jobs growth, have been trending up significantly the past few months across the region. This points towards an acceleration of job growth this spring and summer, continuing the momentum from last summer.