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New analysis: Ohio job growth in November

Rea S. Hederman Jr. and Joe Nichols Dec 19, 2015

Ohio’s jobs report was generally favorable in November. Total employment increased by 9,900 during the month. Private businesses added 7,000 jobs, and governments added another 2,900.

High oil and gas production in Ohio and other states has driven gasoline prices to six-year lows, giving consumers extra spending money in time for the all-important fourth quarter and Christmas season. This has helped the leisure and hospitality industry to prosper, leading to an additional 6,000 workers in November.

The biggest jobs’ loss came in the retail trade, which cut 3,900 employees. The shift to buying consumer goods online is good for delivery service employees but not for retail clerks.

Ohio’s unemployment rate in November was 4.5%, down 0.7% from a year ago. The rate rose slightly from last month but was too small to be considered more than statistical noise. The labor force participation rate—the number of Ohioans either working or looking for a job—has dropped one half-percentage point since last November, continuing a long-term and worrisome trend.

The unemployment rate has declined over the last year, to a large extent, because fewer working-age adults are trying to find jobs. Ohioans who stop looking for work are no longer counted as unemployed. Baby boomers edging closer to retirement age is one reason for the decline, but it is troubling that the participation rate has not increased significantly as the economy strengthens.

Bureau of Labor Statistics data shows that the Cleveland-Elyria metropolitan statistical area has suffered far worse than the rest of Ohio. This area of two million people lost 700 jobs in November while the rest of the state gained 4,200.

Even more startling was a sharp decline in the area’s labor force participation rate. Cleveland-Elyria accounted for three-fourths of the state’s labor force decline. The flood of people leaving the workforce created deceptively good news: the Cleveland-Elyria unemployment fell below the state average. But the cause of the decline—people stopping employment efforts altogether—is not good news at all and signals a struggling economy in northern Ohio.

Next year, policymakers need to focus less on the unemployment rate and more on bringing people back into the labor market.