Oregon’s sluggish economy could be picking up steam, state economists told lawmakers Wednesday, but headwinds like high fuel prices, elevated inflation and a slow job market aren’t making it easy.

In his latest quarterly forecast, the state’s chief economist, Carl Riccadonna, suggested an economic malaise in Oregon following the COVID-19 pandemic may be dissipating.

Yes, the state’s 5.2% unemployment rate is still running well ahead of national unemployment, which has been decreasing of late. But Riccadonna said the Beaver State’s economy is finally growing at nearly the pace of the nation as a whole. As of the first quarter of this year, Oregon’s economic output increased 2.4% over the past year, compared to 2.7% for the national economy.

“The point is that that gap has significantly closed,” he said, noting that Oregon had been trailing the national average by closer to 1%. The state often outpaced national economic growth from 2000 until the pandemic, but has fallen behind in the years since — one reason Gov. Tina Kotek announced a renewed focus on improving the state’s economy last year.

Riccadonna said his office has “been kind of scratching our head” at Oregon’s lagging economy, and hypothesized that impacts from President Trump’s tariffs, combined with job losses at two major state employers, Intel and Nike, were largely to blame.

While tariffs are once again in force, he said the two corporate juggernauts may have smoothed out their wrinkles. Economists will know more when updated numbers are released at the end of September.

Riccadonna and state economist Michael Kennedy also had good news for lawmakers bracing for major federal funding cuts to health care and food benefits.

The latest forecast predicts state tax revenue for the next budget — which stretches from July 2027 to June 2029 — will come in nearly $540 million higher than expected. Should that forecast hold up, it would provide a boost to lawmakers as they work to craft a spending plan in next year’s legislative session.

Kennedy told reporters in a press availability Tuesday evening that the bulk of the newly anticipated money, nearly $400 million, is due to bullish expectations about wage growth.

“Given the malaise in the job market, it really is more about who’s making the money and them making more money,” Kennedy said.

Oregon is also now expecting a bit more money in its current two-year budget, which is just over halfway through. The economists predicted an additional $55 million over the forecast they delivered three months ago.

That boost is tied entirely to personal income taxes. Corporate income taxes, which the state also collects, are now anticipated to come in somewhat lower, a trend Riccadonna attributed to one-time tax decisions rather than a new economic trend.

News Source : https://www.opb.org/article/2026/08/26/oregon-economy-signs-of-improvement-forecast/