Wildlife refuge.

Photographer: David Cannon/Getty Images

Oregon Is the Picture of Economic Health

Matthew A. Winkler is a Bloomberg View columnist. He is the editor-in-chief emeritus of Bloomberg News.
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The biggest recent news from Oregon has nothing to do with the armed occupation of a federal wildlife refuge near the high-desert town of Burns. It's about the state's economic health, the most improved in the U.S. last year.

The 27th-largest state, with almost 4 million people, had the best-performing economy in the nation measured by employment, home prices, personal income, tax revenues, mortgage delinquency and the publicly traded equity of its companies, according to data compiled by Bloomberg.

By punching well above its weight in half a dozen comparisons that make up Bloomberg's Economic Evaluation of States, Oregon's economic health index rose the most through the first three quarters of 2015, according to the most recent Bloomberg data. The closest two rivals for No. 1, North Carolina and Michigan, were at least a full percentage point behind Oregon, failing to achieve the same consistency of improvement across the six business, financial and industrial values in the index.

Only California and Utah exceeded Oregon's 4.35 percent increase in personal income in the nine months ended Sept. 30. Colorado and Nevada alone matched the 9.12 percent increase in Oregon home prices. Oregon benefited from an 11 percent increase in tax revenues, better than 41 other states. Oregon created more jobs than 44 states, with employment growth of 2.73 percent. Mortgage delinquency fell 25 percent during the first three quarters of 2015, better than 45 states, according to Bloomberg data.

For investors, Oregon is a superior bet. While the Standard & Poor's 500 Index lost 7.9 percent since the start of 2015, companies domiciled in Oregon outperformed their S&P 500 peers with a 3.02 percent total return (income and appreciation). Only four states showed overall company equity growth over the same period, according to Bloomberg data.

Oregon's corporate prosperity reflected national strength among financial and consumer discretionary companies. Among the big and small companies that make up the Russell 3000 Index, the financial and consumer discretionary firms based in Oregon were the best in the country, outperforming their peers in these top-performing U.S. industries since last year with total returns of 20 percent and 24 percent. Nike, the Beaverton-based apparel and footwear maker, was the No. 1 stock in the Dow Jones Industrial Average in 2015.

Ahead of the Russell 3000

StanCorp Financial Group {SFG US Equity DES<GO>} was a leader among financial companies, handing stock investors a 65 percent total return, partly because of an acquisition offer from the Japanese insurer Meiji Yasuda Life Insurance. Shares of Cascade Bancorp {CACB US Equity DES<GO>} of Bend gained 17 percent.

Even jobs data that appeared to be discouraging proved otherwise on closer examination. During the recovery from the financial crisis and ensuing recession, the gap between Oregon's unemployment rate and lower U.S. joblessness narrowed steadily, only to widen in 2015.

The paradoxical reason turns out to be a surprise. The sudden increase "probably was caused by a larger than usual number of unemployed people entering Oregon's labor market during the spring and summer months," says Nick J. Beleiciks, an economist for the state. "It took them a little while to find jobs which caused the unemployment rate to increase, but apparently most of those people found work because the unemployment rate fell during the last three months of the year." By December, Oregon unemployment was 5.4 percent, or 1.3 percentage points less than a year earlier, according to Bloomberg data.

Governor Kate Brown, who just completed her first year in office, said in an interview in Portland last month that "what we call young innovators, entrepreneurs, creatives" are "moving here because they want to live here, and then they come here and maybe find jobs." Beleiciks cites U.S. Census estimates showing Oregon's population grew 1.5 percent since 2014, faster than the U.S. population growth of 0.8 percent, making it No. 10 among the fastest-growing states. 

Among the employers perched in the shadow of Nike is 10-year-old Puppet Labs, creator of information technology software for hundreds of global customers from Bank of America to the U.K. government. Founder and Chief Executive Officer Luke Kanies grew up on "a hippie commune" in Tennessee and, like Steve Jobs, attended Oregon's Reed College, where he graduated with a degree in chemistry.

"I like paying my people well and I like my people being happy," he said during an interview in his Portland office. "I'd like them to be the right combination of enough leadership that you know which direction we're going and enough freedom in that you get to make a lot of decisions on your own."

That's a snapshot of Oregon missing in the headlines from Burns. 

(With assistance from Shin Pei)

(Corrects misspelling of Luke Kanies's surname in third-to-last paragraph)

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Matthew Winkler at mwinkler@bloomberg.net

To contact the editor responsible for this story:
Jonathan Landman at jlandman4@bloomberg.net