Ohio sees job losses, increase in unemployment: Is it an anomaly or a problem?

Ohio lost more jobs last month than any other state, and it was the only state that saw its unemployment rate increase, according to preliminary data from two federal surveys from the U.S. Bureau of Labor Statistics.

Some economic researchers warn that the data likely will be revised and they believe a large increase in unemployed Ohioans is due to an irregularity with one of the surveys.

But experts also say many months of labor data and the long-term trends show that Ohio’s recovery from the pandemic-related downturn has sputtered.

“We were growing a lot faster than average, but our growth has slowed while U.S. growth has accelerated,” said Bill LaFayette, owner of Regionomics, a Columbus-based economic and workforce strategy firm.

Ohio employers cut 14,800 jobs last month, which was more than any other state in the nation, according to preliminary and seasonally adjusted data from an employer survey by the U.S. Bureau of Labor Statistics.

However, the Buckeye State’s total nonfarm employment declined about 0.3%. Five other states had larger percentage declines.

Ohio’s unemployment rate increased to 5% in May, up from 4.7% in April, according to preliminary and seasonally adjusted data from a BLS household survey.

Twenty-one states last month saw their unemployment rates fall, while 28 saw no change, the data show.

Ohio’s rate is still lower than the national average (5.8%), and its employment rate has declined 9.9 percentage points since May 2020. Only four other states have seen larger declines in their unemployment rates in the past 12 months.

BLS uses a survey of households to calculate the unemployment rate and the size of the labor force, and it uses data from a survey of employers to produce the closely watched job estimates.

The employer survey has a much larger sample and its estimates do not vary as much as the household survey, said Michael Shields, a researcher with liberal-leaning Policy Matters Ohio. Shields said he believes the increased unemployment rate indicates an issue with the household survey and not an actual change.

But, he said, data from the employer survey shows that Ohio has lost jobs in three of the first five months of this year. May’s data suggest the rapid early recovery from the coronavirus crisis has stalled, Shields said.

“Ohio remains 321,000 jobs short of where we were in February 2020 before COVID-19,” he said.

The employer survey shows that Ohio lost a greater shares of workers in the manufacturing, education and health care sectors than most other states.

Ohio last month also lost 3,400 jobs in the financial activities sector (-1.1%), which was the largest loss in the country in this jobs area.

Locally, some banks have decided to close or consolidate branches, citing low usage and foot traffic.

Large decreases in employment and the labor force reported by the household survey raise a big red flag, which suggests a statistical problem, said LaFayette, with Regionomics and a Wright State University graduate.

But Ohio’s economy also may be struggling with supply-chain issues, LaFayette said, and many employers seem to be having trouble finding workers with the skills they need. The national quit rate was recently higher than it has been in a very long time, he said, and workers have many employment options.

Ohio’s job and economic growth will depend on whether workers have the skills to fill open jobs and whether “wraparound” services like child care are available, he said.

Kurt Lavetti, an associate professor of economics at the Ohio State University, said the May statistics have a strange anomaly and he suspects the data will be adjusted in future revisions. But some data suggests Ohio might be the only state where consumer spending remains below levels from January 2020.

“Consumer spending on transportation in particular has declined more in Ohio than the national average, which is consistent with the BLS data showing about half of the decline in non-farm employment came from the trade, transportation and utilities sector,” he said.

Ohio’s trade, transportation and utilities sector shaved about 7,800 jobs in May (-0.8%).

Rea Hederman Jr., executive director of the Economic Research Center at the conservative Buckeye Institute, said he’s eager to see June’s job and unemployment data, which will be released next month. Sometimes the federal surveys get samples that do not reflect what’s really going on in the labor market, he said.

But Hederman said Ohio’s labor market definitely has cooled off when it comes to the pace of its recovery.

“It has not been a quick, rapid recovery,” he said. “Instead, it seems to be going a little bit in fits and starts, with gradual progress.”

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