Ohio's recovery from deep recession has hit two milestones. For the first time since the summer of 2008, the state's unemployment rate is less than 7 percent and the number of unemployed workers has dropped below 400,000.
Ohio’s recovery from deep recession has hit two milestones.
For the first time since the summer of 2008, the state’s unemployment rate is less than 7 percent and the number of unemployed workers has dropped below 400,000.
October’s jobless rate was 6.9 percent, down from a revised 7.1 percent in September, according to the Ohio Department of Job and Family Services, which also reported yesterday that the number of unemployed people in the state fell by 10,000 last month, to 396,000.
“It’s emotionally significant,” said Benjamin Johnson, a Job and Family Services spokesman. “It feels good that the unemployment rate has fallen below 7?percent. On the flip side, no one would be satisfied with a 6.9 percent unemployment rate and 396,000 unemployed Ohioans.”
Daniel Meges of Chmura Economics & Analytics in Cleveland agreed.
“Psychologically, these are the kind of barriers in which we start feeling more healthy than sick,” the economist said. “Six-point-nine is still a lousy rate historically, but it’s in the realm of weak rather than really bad.”
The report showed a labor force that grew for the second-straight month, with 14,000 Ohioans finding work. Meanwhile, companies say they added 13,900 jobs in October, a turnaround from the 12,000 jobs that were cut in September.
The state’s unemployment rate, which flattened out over the summer, has now moved lower for two straight months.
“All the major metrics moved in the right direction,” Johnson said.
“I wouldn’t call it a strong report,” Meges said. “It’s encouraging.”
Job gains were broad-based last month.
The professional and business sector gained 7,300 jobs, including a 4,300-job gain in the category that includes temporary and contract workers. The government sector added 5,200 jobs, driven by a strong pickup in local government hiring, and there was an increase of 4,200 health-care jobs.
On the downside, there was a loss of 4,100 retail jobs and 2,200 manufacturing jobs last month. For the manufacturing sector, it was the second-straight month of losses for a sector that has helped drive Ohio’s employment gains since the recession ended.
Karl Kuykendall, an economist with IHS Global Insight, thinks the state’s manufacturing sector suffered during the summer and early fall as exports slowed.
“However, going into 2013, exports will slowly pick up steam again and expansion projects, such as the new shift being added to the Toledo Jeep plant, will get manufacturing activity moving again,” he said. “Growth won’t get back to the pace seen during the initial 2010-2011 recovery, but it will be on surer footing.”
During the past year, the number of unemployed workers in the state has fallen by 88,000, while companies have added 96,500 jobs.
There are some worries about the jobs outlook in coming months. Some economists and corporate leaders fret that the country could fall back into recession if there is no resolution to the federal government’s “fiscal cliff,” a combination of tax increases and spending cuts set to go into effect at the beginning of 2013.
“It would be a huge shock to the economy,” Kuykendall said about the possible lack of a deal. “ We don’t think it will happen.”
While a deal might not come until the last minute, something swifter actually might provide a spark, he said.
“It could give a potential upside to the economy.”