Ohio saw a small loss of jobs in May, but more significant are the large numbers of Ohioans leaving the state’s workforce.
The United States added 172,000 jobs in May, more than doubling economists’ expectations. But Ohio saw a modest decrease, losing 2,400, according to the Ohio Department of Job and Family Services.
However, that followed strong gains in previous months — 8,100 in April and 10,100 in March.
Amid those mixed numbers, unemployment continued to fall. It was down to 3.7% in May, the third consecutive monthly decline.
One of the reasons for the drop is concerning, said Molly Bryden, a researcher with the think tank Policy Matters Ohio.
That’s because unemployment only measures the portion of people without jobs who are in the labor force. It doesn’t count people who are too old, too sick, have departed the state or just stopped looking.
“Both statewide and U.S. job gains have consistently surpassed expectations this year,” Bryden said said in a written statement.
“While Ohio’s job losses in May don’t give cause for concern on their own — as monthly job estimates are always subject to revision — job growth doesn’t tell the full story. There are 58,000 fewer working Ohioans in the labor force than there were at this time last year, despite growth in Ohio’s working age population, which increased by 38,000 over the same period.”
It’s hard to say why fewer Ohioans are participating in the labor force, but the portion has now dropped down to the national average.
“Ohio’s shrinking labor force has been driving down the labor force participation rate, which, until May, had hovered above the U.S. rate,” Bryden said.
“Now, that gap has closed. The weakening labor force participation rate could have long-term consequences for Ohio’s economic growth.”
Other dynamics could also have consequences.
Consumer spending — a huge pillar of the economy — has fallen in recent months as Ohioans have become rattled by rising gas prices and other inflation, the Federal Reserve Bank of Cleveland reported earlier this month. And overall inflation hit 4.2%, a three-year high.
While gas prices have fallen on news that the United States and Iran have started to negotiate a reopening of the Strait of Hormuz, experts warn that energy prices could take months to return to their pre-war levels.
Bryden, of Policy Matters, also warned of pain even if Ohioans return to the job force and Ohio keeps adding jobs.
“Even if Ohio sees a hiring turnaround next month, economists warn that stagnant wage growth nationwide could exacerbate the growing affordability crisis,” she said.
“At 4.2%, inflation is the highest it’s been in three years, reflected by the ongoing decline in consumer confidence. In the near term, Ohio’s working families are vulnerable to the inflationary impacts of U.S. economic policy, facing greater challenges to afford the rising cost of groceries and other necessities, along with global energy price shocks caused by the war in Iran.”
This story is republished from the Ohio Capital Journal under a Creative Commons license. View the original article.
