Capital Chatter: Sunny news breaks through Oregon’s economic cloud
Published 6:33 pm Thursday, November 20, 2025
Foggy days will linger, but a dark economic cloud no longer covers Oregon.
That’s what state economists said this week, and they know better than I. (I skipped many of my 8 a.m. economics classes in college, which I belatedly regret.)
Anecdotal evidence implies Oregon’s economy is bad and getting worse. News headlines tell of layoffs that might rival the Great Recession … business closures … school district and government agency cutbacks … people fleeing Multnomah County … downtown Portland buildings sold at steep discounts … Oregon plummeting in various state rankings … .
Yet the limited economic data currently available indicate that life is improving, lessening any likelihood of Oregon falling into a recession, Chief Economist Carl Riccadonna and senior economist Michael Kennedy told legislators and journalists this week.
I asked Riccadona to explain the dissonance.
The state Office of Economic Analysis pays close attention to the headlines, anecdotes and economic narratives, he said, “But ultimately, we have to reconcile that with the data.”
If someone emerged from a cave after a lengthy hibernation, they would find the Oregon economy had changed little despite dire warnings about the effects of federal layoffs, trade wars and so on.
“In no way do we want to make light of some softening in the economy,” Riccadona said. “When we look at jobless claims, when we look at tax revenue, we see evidence of stress. But we also see evidence that it’s not rolling into a recession dynamic but rather just a slower-growth dynamic.”
The caveat is that the lengthy federal government shutdown forced Riccadona and colleagues to make this economic and revenue forecast with incomplete national and state data.
“Our view is that there is some re-acceleration, some improvement underway, but it is still in the very tenuous stages. We still have elevated recession risk. We’re at 25% instead of 10% for an ordinary year,” Riccadona said.
“It’s like flying a plane. You know you’re losing speed. You have confidence that the right things are going to happen, but your dashboard has gone dark.
“There is a risk at a point where you’re worried about, ‘Oh, are we slowing down too much? What’s the economy’s response to the tax cuts? What’s the economy’s response to those tariffs, which really kicked in in August and September?’
“We are flying blind to a degree,” he said. “There could be unappreciated economic consequences taking place that we will only know when the data screens turn back on.”
To Oregonians, the economy is personal: Will I still have a job? What are inflation and tariffs doing to our business? Amazon and online shopping have reshaped consumer behavior, so will customers ever return to my store? Will my Social Security stretch far enough? Must I choose this month among paying for food, housing, medicine or pet food? What kind of a future awaits my kids or grandkids?
Behind the data points are real individuals, families and businesses.
Yet the data affect everyone. As major Oregon businesses have recalculated their past tax bills, the state has reaped millions of dollars in unexpected income. Because of that and other factors, the economists reduced the projected state deficit by $309.5 million. That, in turn, means fewer potential cuts to schools, health care, social services and other state-funded services to balance Oregon’s budget.
Together, the data and the anecdotes influence a multitude of family and business decisions: Whether to add or cut employees. How much to contribute to religious institutions and other charitable organizations. Where to vacation, if at all.
The only certainty is that the quarterly forecast released this week won’t hold up. Legislators will see six more forecasts before the current state budget period ends on June 30, 2027.
“It is extremely unlikely that every one of those six is going to be exactly what we’re forecasting now,” economist Kennedy told journalists. “The next one’s going to be different than this one. We don’t know what direction.”