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Oregon’s Unemployment Rate Holds Flat at 5.2%, With Unexpected Job Losses in Retail and Construction

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Oregon Unemployment Holds Steady Amidst Sector Shifts

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Portland,Oregon – January 24,2026 – Oregon’s unemployment rate remained at 5.2% in December, marking the third consecutive month of stability, according to newly released data. While a static rate might traditionally raise concerns, experts suggest this leveling off represents a positive shift in the state’s economic landscape.

The Stability Explained

the Oregon Employment Department’s latest report indicates a pause after a period of incremental increases in the unemployment figures throughout 2025. State Employment Economist Gail Krumenauer emphasized that this stabilization is a welcome sign, implying a degree of resilience within the Oregon economy.

“Seeing the unemployment rate level off is more stable than the continuous increases we observed for much of last year,” Krumenauer stated.

Job Losses Concentrated in Key Areas

Despite the overall unemployment rate holding firm, the state experienced a seasonally adjusted loss of 2,200 jobs in December. These losses were notably pronounced in sectors typically robust during the holiday season.

Specifically, the retail trade and the transportation, warehousing, and utilities sectors collectively saw 900 fewer jobs than typically added in December. These declines point to evolving consumer habits and the normalization of post-pandemic logistics.

The Rise of E-Commerce and its Impacts

Analysts attribute the struggles in the retail sector to the ongoing shift toward online shopping.According to a recent report by the U.S. Census Bureau, e-commerce sales accounted for 17.4% of total retail sales in the fourth quarter of 2025, a significant increase from pre-pandemic levels. See latest retail data.

The transportation and warehousing sector, which experienced a surge during the COVID-19 pandemic due to increased online order volume, has since plateaued. The boom years of 2020-2022 are over, and employment in these areas has largely stabilized.

Construction Sector Faces Winter Headwinds

The construction industry also experienced weaker-than-usual figures in December,a trend partially attributed to seasonal factors.Oregon’s wet winter weather routinely slows down outdoor construction projects.

Though, the decline – a loss of 5,400 jobs – was steeper than the typical seasonal loss of 2,900, indicating potential underlying challenges within the construction industry.The Associated General Contractors of America reported nationwide construction job openings are down by 8% year-over-year as of December 2025. Learn more about national construction trends.

looking Ahead: Key Figures at a Glance

Here’s a speedy overview of Oregon’s employment situation as of December 2025:

Indicator Value
Unemployment Rate 5.2%
Total Job Loss (Seasonally Adjusted) 2,200
Retail Trade Job Loss 900
Transportation/Warehousing Job Loss 900
Construction Job Loss 5,400

The state of Oregon’s job market appears to be navigating a period of transition. While the flat unemployment rate provides a degree of stability, the sector-specific losses highlight the need for ongoing monitoring and potential adaptation strategies.

What factors contributed to the unexpected job losses in Oregon’s retail and construction sectors in January 2026?

Oregon’s Unemployment Rate Holds Flat at 5.2%, With Unexpected Job Losses in Retail and Construction

Oregon’s labor market presented a mixed picture in the latest report, released today, January 24, 2026. While the state’s unemployment rate remained steady at 5.2% – consistent with the previous month – surprising declines in employment were observed within the retail and construction sectors.This stagnation, coupled with sector-specific losses, warrants a closer look at the factors influencing Oregon’s economic landscape.

Statewide Unemployment Overview – January 2026

The 5.2% unemployment rate translates to approximately 175,000 Oregonians currently seeking employment. While holding steady suggests a degree of stability,economists are noting the lack of anticipated growth. Initial projections for January forecasted a slight decrease in unemployment, fueled by holiday season hiring extending into the new year. This did not materialize.

* Labor Force Participation: Oregon’s labor force participation rate remains at 61.8%, slightly below the national average.

* Initial Claims for Unemployment: New claims for unemployment benefits saw a modest increase of 3% compared to December, indicating a potential softening in the job market.

* Total Nonfarm Employment: Oregon added a net of 1,500 jobs statewide, a substantially lower figure than the average monthly gain of 4,000 jobs observed throughout 2025.

Retail Sector Struggles – A Deeper Dive

The retail sector experienced the most notable job losses this month, shedding 3,800 positions.This downturn is attributed to a combination of factors:

  1. Shift to Online Shopping: The continued dominance of e-commerce continues to impact brick-and-mortar stores.While this trend isn’t new,its acceleration during the holiday season was more pronounced than expected.
  2. Inventory Adjustments: Many retailers are reporting overstocked inventories following a slower-than-anticipated holiday shopping period. This has led to reduced staffing needs for inventory management and sales.
  3. Economic Uncertainty: Lingering concerns about inflation and potential economic slowdowns are impacting consumer spending, further contributing to the retail sector’s woes.

Several smaller,independent retailers across the state have already announced closures,citing rising operating costs and decreased foot traffic. the oregon Retailers Association is advocating for state-level initiatives to support small businesses and encourage local shopping.

Construction Sector Slowdown – Impacts and Causes

The construction industry also experienced unexpected job losses, with 2,500 positions eliminated. This decline is notably concerning given Oregon’s ongoing housing shortage and infrastructure needs. Key contributing factors include:

* Rising Interest Rates: Increased interest rates have made construction financing more expensive, slowing down both residential and commercial projects.

* Material costs: While lumber prices have stabilized somewhat, the cost of other essential building materials – such as steel and concrete – remains elevated.

* Permitting Delays: Ongoing delays in the permitting process for new construction projects are hindering development and impacting employment.

The slowdown in construction is particularly noticeable in the Portland metropolitan area, where several large-scale development projects have been put on hold. This has ripple effects throughout the supply chain, impacting related industries like manufacturing and transportation.

Sector Luminous Spots – Where Oregon is Seeing growth

Despite the challenges in retail and construction, some sectors are demonstrating resilience and growth:

* Healthcare: Healthcare continues to be a strong employer in Oregon, adding 1,200 jobs this month. This growth is driven by an aging population and increasing demand for healthcare services.

* professional and Business Services: This sector added 800 jobs, reflecting continued demand for specialized skills in areas like accounting, consulting, and technology.

* Leisure and Hospitality: While still below pre-pandemic levels, the leisure and hospitality sector added 500 jobs, boosted by winter tourism in mountain regions.

Regional Variations in Oregon’s Employment

Employment trends vary significantly across different regions of Oregon:

* Portland Metro Area: Experienced the largest job losses, primarily in construction and retail. The unemployment rate in the Portland metro area is currently 5.5%.

* Willamette Valley: Remained relatively stable, with modest gains in healthcare and agriculture.

* Southern Oregon: Saw a slight increase in unemployment due to seasonal declines in agricultural employment.

* Eastern Oregon: Continued to struggle with high unemployment rates, exacerbated by the closure of a major lumber mill in Klamath Falls last quarter.

Resources for Job Seekers and Employers

Oregonians seeking employment can access a variety of resources:

* Oregon Employment Department: Offers job search assistance, training programs, and unemployment benefits: https://www.oregon.gov/employment

* worksource Oregon: Provides career counseling, resume workshops, and job placement services: https://www.worksourceoregon.org/

* Local Community Colleges: offer a range of vocational training programs to help individuals develop in-demand skills.

Employers facing workforce challenges can utilize resources such as:

* Oregon Workforce Development fund: Provides grants to support employer-sponsored training programs.

* Tax Credits for Hiring: Various state and federal tax credits are available to incentivize hiring.

* Industry-Specific Associations: Offer networking opportunities and access to qualified candidates.

Looking Ahead – Economic Forecast for Q1 2026

Economists predict that oregon’s labor market will remain sluggish in the first quarter of 20

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