COLUMBUS, Ohio (CGE) – The monthly financial report Ohio budget director J.Pari Sabety sent to her boss Friday, defeated and outgoing Gov. Ted Strickland, says that Ohio’s unemployment rate (for October) decreased for the seventh consecutive month and that tax receipts, up 5.4 percent for November, were ahead of last year’s revenue at this time by 11 percent.
While Strickland may point to the information released by the Office of Budget and Management as proof that Ohio’s economic struggles are improving rather than deteriorating, Gov.-elect Kasich and the new crop of Republican lawmakers Ohioans sent to Columbus on Nov. 2nd will likely understand that employment, still at a painful 9.9 percent, and a looming budget shortfall of $8 billion or more are still a one-two punch that could put the state back on the canvas as he and a new General Assembly sharpen their knives to balance the budget through spending cuts, not revenue increases.
Strickland budget report a short read for Kasich
The report noted early on that Ohio employment increased by 8,400 jobs, but losses of 9,800 jobs in financial activities and 6,800 jobs in government represented the greatest categories of the newly unemployed.
As legislators in Washington wrestle with the pros and cons of the Obama-McConnell tax package, which many economists functionally equate to a second stimulus bill for the White House, of the $8.2 billion in funds Ohio is expected to receive from the first one, passed in February of 2009, $5.83 billion has been received but $2.43 bill has yet to be spent, creating an undetermined number of future jobs that may be a cushion against a further economic recidivism the state may experience going forward.
U.S. employment was weaker than widely expected i November, the report noted. The national unemployment rate, once a couple ticks lower than Ohio’s, is now nearly equal, at 9.8 percent.
Sabety told Strickland that the consensus among forecasters is that the “economy will continue to muddle along at a sub-par pace” and that Ohio’s economy is expected continue to grow but at a slow pace.
On the job front, the report said “Labor markets still have far to go to return to pre-recession conditions,” noting that the rate has exceeded nine percent for a post-war record 19 months.
BLS report shows job seekers outnumber jobs
In related news, the Bureau of Labor Statistics released a mildly encouraging October report from the Job Openings and Labor Turnover Survey last week, showing that job openings increased by 351,000 in October, while revisions to earlier data reveal that there were 82,000 more job openings in September than previously reported.
The bad news in the report should cause Kasich and Ohio legislators to temper any dreams they have of mounting a robust recovery. The total number of job openings in October was 3.4 million, the report noted, while the total number of unemployed workers was 14.8 million (according to the Current Population Survey). This represents the highest number of monthly job openings since August 2008. The ratio of unemployed workers to job openings improved to 4.4-to-1 in October, an increase from the revised September ratio of 4.9-to-1.
While this grim report noted that the trend in the job-seekers ratio has been improving over the last few months, it is also a reminder that the current ratio is still over 50 percent higher than its peak (2.8-to-1) during the early 2000s recession.
Put another, more simpler way, there are no jobs for more than three out of four unemployed workers. The BLS report, as reviewed by Elise Gould of the Economic Policy Institute, cautioned that when calculating the ratio of job seekers to job openings, “if we were to include not just the 14.8 million unemployed workers, but also the 9.2 million ‘involuntarily part-time’ workers (those who want and are available for a full-time job, and are therefore likely job searching), the ratio would be 7.1-to-1.” Gould said that although these numbers show some improvement in the labor market in October, the number of unemployed continued to rise by nearly 300,000 in November. “Clearly, the labor market has a long way to go before we see anything resembling a recovery,” she wrote.
Read the full report here.
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