Job Losses and Rising Unemployment: 2025 in Review
February 02, 2026Oregon’s annual job growth turned negative in 2025. Gains did occur in a handful of sectors, although they were highly concentrated in private health care and social assistance. The state’s labor force grew slightly in 2025. Rising numbers of jobless workers resulted in the highest unemployment rate – outside a recession or recovery period – in a decade. Looking ahead, Oregon’s Office of Economic Analysis expects a rebound to slow job gains in 2026.
Slow Job Growth
In 2025, Oregon employers lost 3,300 jobs (-0.2%) from nonfarm payrolls. The only other years with annual job declines since 1990 were those with recession-related losses.
The gains Oregon had between 2024 and 2025 were highly concentrated in private health care and social assistance. This one sector alone added 13,300 jobs between 2024 and 2025, a gain of 4.4%. Government added 3,300 jobs (+1.0%) in 2025. Three-fourths (or 76%) of the public-sector gains occurred in local government, which includes public K-12 education, community colleges, public universities, as well as city, county, and regional public services.
Meanwhile, some sectors of Oregon’s economy had notable job losses in 2025. They included manufacturing, which lost 6,900 jobs (-3.7%) between 2024 and 2025, and retail trade, which dropped by 3,100 jobs (-1.5%). Wholesale trade declined by 2,200 jobs (-2.8%) over the year; administrative and waste services dropped 2,100 jobs (-2.1%); and the information sector declined by 2,000 jobs (-5.6%). All other broad sectors of Oregon’s economy changed by less than 2,000 jobs between 2024 and 2025.
A diffusion index provides another way to look at the dispersion of employment growth. In this index, sectors with employment gains over a given time period receive a score of 100, while those with job declines are scored as 0, and sectors with unchanged employment are coded with a score of 50. The diffusion measure is the average of these scores across all sectors based on their job changes. An average score above 50 means more sectors are growing than not, while a score below 50 means more sectors lost jobs than added them.
On a 6-month basis, Oregon spent all of 2025 with more sectors losing jobs than adding them. On a 12-month basis, all but January showed more sectors with losses than not. The state’s diffusion indexes floated between roughly 20 and 30 for half of the year. Some improvement showed by year’s end though. The most current diffusion index readings, as of December 2025, were 44 for the 6-month change, and 42 for the 12-month change. That means preliminary estimates show job growth became a bit more widespread across sectors of Oregon’s economy during the last few months of the year.
Health care and social assistance accounted for the lion’s share of job gains for the third consecutive year. The sector added 13,300 jobs between 2024 and 2025, after adding an annual average of 16,100 jobs in 2024, and 15,400 in 2023. It consists of four main subsectors: ambulatory health care services, hospitals, residential and nursing care facilities, and social assistance. Each of these components had strong job growth between 2024 and 2025.
Within private health care and social assistance, the largest annual gains in 2025 occurred in nursing and residential care facilities. This includes care settings for the elderly, establishments providing mental health and substance use services, and other care facilities. They had an annual average gain of 3,900 jobs (6.9%), for a total of 60,500 jobs in 2025.
Oregon’s private social assistance employers also added 3,900 jobs in 2025. That was a gain of 4.9%, to reach a total of 82,700 jobs. Social assistance includes individual and family services, including those for the elderly or disabled. Social assistance also includes businesses primarily engaged in community food and housing, child day care services, and vocational rehabilitation.
Ambulatory care services had almost as large a gain, adding 3,200 jobs (3.1%) in 2025. These doctors’ and specialists offices had an average of almost 107,000 jobs. Oregon’s private Oregon’s private hospitals gained an annual average of 2,200 jobs in 2025, an increase of 3.5%.
Oregon continued to see slow labor force growth in 2025. Oregon added 20,200 people (0.9%) to the labor force between 2024 and 2025. That was comparable to labor force gains in Oregon each year since 2022, and faster growth than the pre-pandemic years of 2018 (0.1%) and 2019 (0.6%).
The main difference in labor force trends between 2025 and the pre-pandemic period is that in 2018 and 2019, employment was rising and unemployment fell. In 2025, all of Oregon’s labor force gains were due to rising unemployment. Oregon’s labor force gains totaled 20,200 between 2024 and 2025. The number of Oregonians who were employed either on a company payroll, on a farm, on contract or were self-employed was essentially unchanged, while unemployment rose by 20,200.
Looking at the year ahead, the Oregon Office of Economic Analysis (OEA) forecasts a return to slow job growth in 2026. OEA expects Oregon employers to add 10,000 jobs to nonfarm payrolls between 2025 and 2026. That’s a growth rate of 0.5%, or an average gain of about 800 jobs per month. This would still be slow growth by historical standards, but would be well above the losses of 2025, or the smaller annual gain of 5,600 jobs in 2024.
The largest employment gains between 2025 and 2026 are expected to occur in professional and business services (+9,100 jobs) and health care and social assistance (+2,400). OEA anticipates job losses occurring in government; some areas of the manufacturing sector; financial activities; and the information sector.