Salem MSA: The Year in Review 2020

by Pat O'Connor

September 2, 2021

2020 is quite a year to review. A year that brought an end to the United States’ longest post-WW II economic expansion to a grinding halt. An ongoing global pandemic that shut down large parts of our economy and took more than 500,000 lives nationally in 2020. The Beachie Creek Fire covered the Willamette Valley with smoke and ravaged the Santiam Canyon in the fall of 2020. The recession in 2020 brought unprecedented job loss and a slow recovery in the U.S and Oregon; that was also the case in the Salem MSA.

Salem MSA Labor Force

Similar to the U.S. and Oregon, The Salem MSA began 2020 with a very tight labor market and near all-time low unemployment rates in the area. That tight labor market continued until the middle of March 2020, when public health measures quickly closed down much of our economy where social distancing was not possible. Although COVID related closures in Oregon began in March, we did not see those closures reflected in the labor force numbers until the April data when the Salem MSA’s seasonally adjusted unemployment rate jumped from 3.9% in March to 11.6% in April; the largest single month jump in Salem’s history and the highest unemployment rate in Salem during the current series, which dates back to 1990. The second highest unemployment rate in Salem occurred during The Great Recession, when Salem’s unemployment rate peaked at 11.1% in the spring of 2010, in the depths of The Great Recession.

Salem’s unemployment rate remained in double-digits for April and May and then began to decline as the summer went on. By the end of 2020 Salem’s unemployment rate was down to 5.7% in December; down significantly from its peak of 11.6% in April, but 2 percentage points higher than where the unemployment rate was prior to the pandemic.

Total Nonfarm Employment

On an annual average basis, Oregon’s payroll employment dropped 125,200 jobs or -6.4% in 2020. That compares with a gain of 31,400 jobs or 1.6% growth in 2019.

Salem’s job loss was less severe compared to Oregon’s employment losses in 2020; Salem shed 8,300 jobs or -4.8% in 2020. In 2019, Salem’s employment growth was slightly faster than the statewide growth rate, adding 3,400 jobs to expand 2.0%.
The Salem metro area was similar to Oregon and the nation with the leisure and hospitality sector showing the steepest losses during 2020. In Salem the sector shed 2,700 jobs or -17% in 2020.  

Salem’s manufacturing employment declined 1,300 or -9.8% in 2020. The largest losses were in nondurable goods manufacturing, which shed 800 jobs in 2020. 

Professional and business services recorded employment losses in 2020, shedding 1,200 jobs, or -7.1%. Most of those losses were in administrative and support services, which includes temporary staffing agencies.

Salem’s construction sector has shown fast growth in recent years, and it was one of the few industries that added jobs in 2020. The sector added 200 jobs (+1.6%) in 2020. Statewide construction employment showed a slight drop; it was down 1.4% in 2020.  

Transportation, warehousing, and utilities added the most jobs of all industries; it added 800 jobs in 2020, growing nearly 14%.

The Salem MSA’s public sector employment level was down 1,200 jobs. The job loss was concentrated in local education, which shed 1,200 jobs or -10.2%.          

Benchmarking Process

The newly revised payroll employment numbers are the result of the annual benchmarking process. This revision process is conducted by the Oregon Employment Department staff in cooperation with the U.S. Department of Labor, Bureau of Labor Statistics. Employment numbers for both 2019 and 2020 are revised. For the monthly data through September 2020, original survey-based estimates were replaced with universe employment counts from the Unemployment Insurance tax system. Numbers from October through December 2020 were then re-estimated using sample employment data from a survey of businesses.

 


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