State economist gives insight into Oregon’s slowing economic reality

Oregon’s economic activity is declining, population growth is slowing and unemployment is rising — all at a faster pace than the U.S. 

While the state’s economy is slowing down, there’s hope for moderate growth in 2026, State Economist Carl Riccadonna told lawmakers this week.

An economic upturn in 2026 is possible as interest rates are on the decline, which usually spurs home buying, business investment and vehicle sales, he said. Tax cuts for businesses from a new law President Donald Trump signed in July will also likely stimulate more economic movement, he said. 

A pending U.S. Supreme Court ruling could cut Trump’s tariffs in half, which would be good news for Oregon, Riccadonna said. Oregon is leading the lawsuit challenging the Trump administration’s tariffs. The Oregon Department of Justice earlier this month argued the case before the U.S. Supreme Court. 

“If the Supreme Court rules against the tariffs… It’s a tax cut nationally that would be worth about $200 to $250 billion, or here in Oregon a tax cut of probably  $2-3 billion,” he said. 

In the meantime, Oregon’s unemployment rate rose to 5% this year, according to the latest state employment data available. That data doesn’t show the full picture, as the federal government didn’t release a monthly jobs report because of the government shutdown.

Oregon lost 18,000 nonfarming jobs between August 2024 and August 2025, ranging from jobs in manufacturing, construction and trade and transportation, according to Riccadonna. 

The rise in unemployment is largely attributable to Multnomah and Washington counties, where large employers including Wells Fargo, Intel and Providence have laid off hundreds of employees working within the Portland metropolitan area.

Recommendations for Oregon

Economic policy expert John Tapogna said Oregon’s policies are outdated for the challenges the state faces today.

The state’s population is moving at a slower rate than the country as a whole as deaths in Oregon outnumber births. While this could mean there’s less pressure on the housing market, Tapogna said it also means fewer people who are innovators or employed in the state’s child care, health care and education industries.

He recommended the state focus on five things to bring people to Oregon.

First, he said Oregon should focus on making housing more affordable as housing prices continue to outpace household incomes. The median sale price of a home is $513,000, according to housing website Redfin. Meanwhile, the median household income in 2024 was $89,700, according to Federal Reserve Economic Data.

Second, Oregon’s in the bottom half of states in reading and math scores among fourth and eight graders, according to the National Assessment for Education Progress. This disincentivizes families with children from moving to the state. 

Third, wildfire risk and the potential for poor air quality makes buying a home in Oregon less attractive.

Fourth, Oregon’s tax rate, particularly in Multnomah County, influences where households and businesses choose to move. 

Lastly, Tapogna said Oregon needs to shift its perspective on growth and change the narrative to it being a good thing for the state.

“​​Many of Oregon’s systems—our schools, regulations, land use rules and permitting processes—were built for a different time, to solve yesterday’s problems,” he said. “But the future has never looked less like the past than it does right now.”

Oregon still has its strengths, he said, including its natural beauty, urban growth capacity without sprawl, its legacy of innovation and its potential for more clean energy. 

“I would argue that for any of us here, the next five to 10 years is going to change much more dramatically in terms of demography, in terms of technology, in terms of climate, than in any five year period you can think of in other times of your life,” Tapogna said.