Oregon Office of Economic Analysis

Unfortunately standard demographic and population data lags considerably. If you want to talk migration details we are still primarily working with 2020 IRS tax return data, and 2021 ACS estimates from Census. We know 2022 total population estimates, but none of the details. And yet we – a collective we, not just our office — are curious about what is happening today. I have received quite a few media requests lately on this topic so I thought I would post an update of what we know and when we will know more.

Key dates ahead. We get the 2022 ACS published tables from Census on September 14th. This will provide our first look at socio-economic characteristics of migrants (among many other things like income, poverty, household formation, working from home and the like). Then we get 2023 total population estimates in November (Portland State) and December (Census), but have to wait until Fall 2024 before we know the characteristics.

All of that said, there are three new pieces of data that shed some light on recent population trends.

First, deaths in Oregon continue to outnumber births. Births are declining, while deaths are now reverting toward the pre-pandemic trend. This is preliminary data and will change. But it is looking like this natural change in the population will be slightly less negative than we anticipated, although only slightly so. Overall our office expects deaths to outnumber births in the decades ahead, primarily a result of the state’s low birth rate (5th lowest nationwide in recent years).

Second, with a natural population decline it means Oregon is fully reliant upon migration for any population growth. If we take a look at surrendered driver licenses at Oregon DMVs, it shows in-migration at levels consistent with and even a bit higher than the past decade. This data does not indicate people have stopped moving to the state, given inflows appear normal. However this data does not show out-migration, which could be the bigger issue here given housing affordability, working-from-home, livability, taxes, or any other factors influencing household decisions. Note that the relative strength in surrendered licenses continues to come from Washington, California, and other western states.

Third, there is new, updated migration data from the Federal Reserve Bank of Cleveland. This is based on consumer credit reports through 2023q1. This is something the Cleveland Fed has done a few times during the pandemic and is incredibly helpful as it provides closer to real-time estimates to track. Here are the biggest takeaways for me from the latest data. Keep in mind among the metros tracked in this data, Portland is the only Oregon location.

Net migration for the Portland metro area is still negative over the past year. Now, it is getting less negative, and trending in the positive direction, see below for more, but still down overall. There does remain a net influx of residents from other large, high cost of living metro areas, while Portland is losing population to lower cost of living areas, small and medium sized metros, and rural areas. Keep in mind at the metro level this includes both the Oregon side and the SW Washington side. It’s hard to know the extent of the pull across the river until we get more complete Census data. (Given that domestic migration to Clark County, WA was essentially cut in half going from 2021 to 2022, I will be very interested in seeing more details and following that in the years ahead.)

Additionally, among urban neighborhoods, Portland continues to lose population, even as the metro level numbers are starting to turn around. Here are two pull quotes from the Cleveland Fed research I think are worth reading:

“Both the urban neighborhoods and the overall metro areas of New York, San Francisco, and the other most populous metro areas are returning to their prepandemic trends of slowly increasing net outflows. The additional rush seen during the pandemic is disappearing.”

“The urban neighborhoods of Phoenix, Las Vegas, Seattle, Portland, and Sacramento are exhibiting elevated outflows. These same regions no longer have positive net migration from across the nation but instead are drawing only from high-cost metro areas.”

Finally, there is something very important I wanted to note about the Cleveland Fed data. They publish data that is a 4 quarter average. This is great in that it tells you what happened over the past year. But what we really want to know today is whether the pandemic era patterns remain or if things are starting to change. With the data being 4 quarter averages you can back out, or estimate what the underlying quarter-to-quarter changes are underneath the published data. Below is one such estimate. Now, these calculations are somewhat sensitive to the assumptions made. Even so the upshot is this. It is mathematically impossible for net migration to the Portland metro area to be entirely negative in recent quarters. The improvements in the 12 month changes mean that at least 1 of, and possibly all 3 of the 3 most recent quarters saw positive migration for the region.

Bottom Line: Given the state’s demographics, any population growth in the years ahead will have to come from migration. The state still offers plentiful job opportunities and a high quality of life, long believed to be key factors in migration patterns. However the state’s bad housing affordability, especially in the world where working-from-home is more common, in addition to other migration factors could result in slower migration than expected moving forward. To date, both data nationally, and in Oregon point toward some of the pandemic era patterns subsiding. That said, Portland appears to be continuing to lose residents in the urban core, while the metro level is now treading water. If true, that is a clear improvement from a year ago. Our office expects overall migration for the state to rebound in the years ahead, albeit at relatively low levels from an historical perspective. This is especially true once you factor in the natural population decline.

All of this matters economically both in terms of near-term demand in the economy in terms of Oregonians buying and selling goods and services, but also longer-term when it comes to the labor force. Historically we know that 20- and 30-somethings move at the highest rates, and they primarily move for a job or in search of a job. As they start to settle down, begin their careers in earnest, get married, have kids, buy a house and the like, they do not tend to move again until later in life. As such, a slowdown in migration today could result in slower economic growth in the future. That is why our office pays such close attention to population patterns. And of course, economic growth is not about labor alone, but the combination of labor and capital. In a world where migration does not rebound as expected, Oregon must rely even more on capital, business investment, and productivity gains to drive future economic growth.