Welcome job news, but sustained growth is needed

Policy Matters Ohio - March 2, 2012
   
For immediate release
Contact: Hannah Halbert, 614.221.4505
Full report

In January 2012, Ohio’s unemployment stood at 7.7 percent, falling 0.2 points from December’s revised 7.9 percent (previously released as 8.1 percent). Most of this month’s improvement comes from employment gains rather than a dwindling labor force. Over the past year, while the number of unemployed has fallen, the size of the labor force has dropped. This means that though the unemployment rate falls, many workers are dropping out of the labor force, not finding new jobs. This month’s data, however, show a much smaller decline in the labor force, declining 0.1 percent, or 1,000 individuals, and a stabilized labor force participation rate, 64.2 percent.  

While this is welcome news, Ohio continues struggle to add jobs. Ohio must create 293,300 jobs in order to return to the pre-2007 recession employment, and that figure would be even higher if population growth were taken into account. From January 2011 to January 2012, Ohio only added 62,500 jobs, a growth rate of 1.2 percent. If this rate continues, it will take nearly four years just to return to pre-2007 recession levels of employment. In January 2012, Ohio’s unemployment stood at 7.7%, falling 0.2 points from December’s revised 7.9 percent (previously released as 8.1 percent). Most of this month’s improvement comes from employment gains rather than a dwindling labor force. Over the past year, while the number of unemployed has fallen, the size of the labor force has dropped. This means that though the unemployment rate falls, many workers are dropping out of the labor force, not finding new jobs. This month’s data, however, show a much smaller decline in the labor force, declining 0.1 percent, or 1,000 individuals, and a stabilized labor force participation rate, 64.2 percent.  

 Today’s data release from Ohio Department of Job & Family Services included major revisions to the data based on annual benchmarking from unemployment tax records.  Numbers from the monthly survey of employers, known as the Current Employer Survey, were revised, changing employment gains in earlier years. In 2011, Ohio saw an increase of only 37,800 jobs, instead of the 72,400 reported earlier. Similarly, the 2010 calendar year gain of 31,000 was revised upward to 54,900 jobs. Though none of these gains suggest a strong labor market, it does appear they were a bit stronger in 2010.

“While a falling unemployment rate is welcome news, we need sustained, major employment growth to pull people back into the labor market, which we have yet to see,” said Hannah Halbert, policy liaison with Policy Matters Ohio. “Investment in our economy has been too small, and job recovery has been too slow.” 

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