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Posted: 11:43 a.m. Friday, Oct. 19, 2012

Ohio unemployment rate falls to its lowest rate since 2008

State also shed 12,800 jobs in September

By Cornelius Frolik

Ohio’s unemployment rate in September dipped to 7 percent, the lowest rate in four years, as more residents reported having jobs and the state’s workforce grew, according to federal labor data released Friday.

Ohio’s unemployment rate edged down after being stuck at 7.2 percent between June and August, according to the U.S. Department of Labor. The state’s jobless rate remains below the national average of 7.8 percent, and it improved from 8.6 percent in September 2011.

But other new government survey data show Ohio’s payrolls shed 12,800 jobs last month — the second highest job loss in the nation — and half of the losses were in manufacturing.

Some economists and state officials said the data come from two separate surveys that can produce different and sometimes contradictory results. The last state report on jobs and unemployment before the Nov. 6 election sends mixed messages that probably will not change the minds of many voters. But experts said Ohio’s economy has a long way to go before employment returns to pre-recession levels.

“There is a fair amount of month to month volatility in the estimates, so it is better to look at moving averages of these estimates over several months to get a better feel for what is happening to employment,” said Thomas Traynor, an economics professor with Wright State University. “Using the longer view of the moving averages over the past one to two years, the state continues to experience steady but slow improvement in the labor markets.”

Last month, Ohio’s unemployment rate fell to the lowest rate since September 2008, and it was the first decline since June, according to the labor department. The state’s jobless rate has remained flat or decreased every month since June 2011.

Ohio’s workforce in September grew slightly and the number of Ohioans with jobs also saw a slight uptick, according to the department’s survey of households. The increases, however, were within the survey’s margin of error.

Officials said the data suggest the unemployment rate dipped without the assistance of people dropping out of the labor force. In past months, the unemployment rate improved largely because many people gave up on the job hunt and disappeared from the workforce. But that did not appear to be the case in September.

“Discouraged workers were not a factor specifically in the month of September, even though they have been a factor in recent months,” said Benjamin Johnson, a spokesman with the Ohio Department of Job & Family Services. “The unemployment rate declined because more Ohioans said they were working.”

Ohio still in slow recovery

But the decline in unemployment and increases in working Ohioans and the size of labor force were inconsistent with data from another government survey of businesses and firms.

The survey of firms found that about 5.18 million Ohioans were employed in nonfarm occupations in September, down by about 12,800 jobs from August. Only Michigan had a larger decline during that time with 13,000 loss jobs.

Johnson said the survey of businesses is a survey of jobs, and it oftentimes fails to capture workers who are self-employed or work in agriculture. The household survey counts these workers, and that could account for some of the discrepancies.

“It was a mixed bag,” Johnson said. “There’s no easy way to reconcile (the numbers), it’s just simply the fact that they are two different surveys and in September they returned two different results.”

The surveys sometimes tell different stories because they collect information from different groups with different sample sizes, said Hannah Halbert, policy liaison with Policy Matters Ohio. She said the surveys last returned different findings in the spring.

“The numbers are preliminary and subject to revisions, so it is not a good idea to make too much of the monthly changes,” she said.

But the year-over-year data from the establishment survey are somewhat discouraging, because they show the state has only added 88,700 jobs since September 2011, Halbert said. At that rate it will take almost three more years to reach pre-recession levels of employment, she said.

“September’s report is truly a hodgepodge of data,” she said. “The one thing that is clear from this month’s report is that Ohio’s economy is fragile and we remain a long way from full recovery.”

The data were inconsistent, but the state’s surveys show that about half of the 12,800 jobs lost in Ohio last month were in manufacturing, said George Zeller, an economic research analyst in Cleveland.

This is terrible news because the state’s steady, albeit slow, recovery was driven primarily by growth in the manufacturing sector, he said.

“Instead of spending up the recovery, we are slowing it down,” Zeller said.

Locally, manufacturers are trying to grow their payrolls, but have struggled to find workers with the necessary skills, said Angelia Erbaugh, president of the Dayton Region Manufacturers Association. “For at least 18 months, manufacturers have been saying to me they would hire more people, but they can’t find people with the right skill sets,” she said.

Unemployment has been a political football and key theme in the presidential and congressional campaigns, and Friday’s numbers were no different. As a supporter of GOP presidential nominee Mitt Romney, Gov. John Kasich has faced the political dilemma of promoting the state’s recovery as a model while saying President Barack Obama’s policies are holding Ohio back.

Ohio has 18 electoral votes, seventh most in the nation, and no Republican has won the White House without carrying it.

“It’s encouraging that Ohio’s unemployment rate continues to drop and that the workforce is growing, but we’re far from out of the woods yet and too many Ohioans are still out of work,” said Kasich spokesman’s, Rob Nichols, in a prepared statement. “The timid recovery overall and the stiff headwinds from Washington certainly aren’t helping.”

U.S. Sen. Rob Portman, R-Ohio, blamed the loss of jobs of residents leaving the workforce, and he said it showed Washington needs new leadership.

“The loss of 12,800 Ohio jobs shows that the Obama economy is not performing where it needs to be,” he said.

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