“We had a nice, strong trend of people coming into the labor force looking for work for quite awhile, and that finally stalled last month,” Nichols said. “The unemployment rate fell, which people take for a good sign, but unfortunately the unemployment rate only fell because more people stopped looking for work.”
Nichols also expressed concern that most of the job growth last month was in government employment, which increased by 9,600 jobs in local (5,100), state (4,100), and federal (400) government positions.
Meanwhile, the private service-providing sector lost 1,200 jobs, with employment losses in educational and health services ( down 6,500), financial activities (2,500), and other services (1,200).
“When state government is the leader in new jobs, that is a bad sign that Ohio’s real economic engine — private sector employers — has stalled,” Nichols said, noting that even the gain in government employment may be short-lived because of Ohio’s recently announced $1.1 billion budget gap.
“We’re coming up on the next state budget, and there’s a $1.1 billion budget hole from losing Medicaid tax revenue,” he said. “That’s going to affect counties as well as the state. So the question is whether it’s really good for the local government or state government to be doing all this hiring when they might have to cut jobs when the budget comes out because of lost tax revenue.”
Ohio performed better than most other states in terms of employment last month, according to the U.S. Bureau of Labor Statistics (BLS).
Ohio was one of only 18 states that showed gains in nonfarm payroll employment, while employment decreased in three states and the District of Columbia, and was essentially unchanged in 29 states, according to the BLS.
Ohio was the only state that saw its unemployment rate decline in June, while unemployment rates were significantly higher in six states and unchanged in 43 states and the District of Columbia.
The U.S. unemployment rate was 4.9 percent last month, up from 4.7 percent in May, the BLS reported earlier this month.