Meet the Author

Guhan Venkatu |

Vice President and Senior Regional Officer

Guhan Venkatu

Guhan Venkatu is vice president and senior regional officer at the Pittsburgh Branch of the Federal Reserve Bank of Cleveland, where he manages relationships with key stakeholders in the area and is responsible for monitoring the region’s economic environment. For the past several years, his economic research has focused on inflation and inflation expectations, housing and household finance, and factors related to regional economic growth.

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Economic Trends

Employment Growth Slows in Ohio

Guhan Venkatu

Employment in Ohio has grown 2.7 percent since the start of the recovery (June 2009 to March 2013). Over the same period, national employment grew almost a percentage point more (3.5 percent). Elsewhere in the District, employment in West Virginia and Pennsylvania grew at rates similar to that seen in Ohio, 2.6 percent and 2.5 percent, respectively. By contrast, Kentucky saw growth above the national average at 4.1 percent. Among the other 50 states, North Dakota saw the largest employment gain—driven by a boom in energy production—followed by Utah and Texas, while New Mexico and Missouri experienced employment declines.

Ohio’s employment growth to this point in the recovery puts it close to the middle of the distribution (30th). However, its relative ranking has changed over the course of the recovery. In August 2010, Ohio ranked 25th among the 50 states. Over the ensuing year and a half, its ranking improved, drifting up into the top 15 by the beginning of 2012. But since June 2012, Ohio’s ranking has moved back toward the middle of the distribution.

In part, this movement reflects the weak employment growth Ohio has experienced in the past year. In the twelve-month period ending in March 2013, Ohio’s employment was essentially unchanged, growing a meager 0.1 percent. This represented the third-worst growth rate among the 50 states. (The worst growth rate occurred in another Fourth District state, Pennsylvania.) At the same time, national employment grew 1.4 percent, with the 10th and 90th percentiles of the state-employment change distribution continuing to experience employment gains. This pushed Ohio away from the higher-growth states and toward the lower-growth states.

One key difference between Ohio and the U.S. during this period relates to changes in construction employment. Nationally, construction employment grew about 2.9 percent in the twelve months ending in March 2013. By contrast, construction employment fell about 5.2 percent in Ohio over the same period. It’s important to point out, however, that until the third quarter of last year, year-over-year changes in construction employment had been far stronger in Ohio than in the U.S. throughout the recovery. Additionally, since December 2007, when the recession began, the cumulative change in construction employment in the two geographies has been about the same. Nevertheless, construction has clearly contributed negatively to Ohio’s overall employment change in the last year.

While construction is an obvious source of underperformance for Ohio—having grown nationally but not statewide—several other sectors show the same pattern, albeit less dramatically. These sectors include retail trade, transportation and utilities, leisure and hospitality, and information. Collectively, these industries account for about one-third of Ohio’s employment.

In the cases of government and businesses services, where the direction of growth was the same—negative for the former and positive for the latter—Ohio still saw either larger declines or less growth than the associated national industry. Manufacturing and mining were the two sectors that grew noticeably more in Ohio over this period. These industries collectively account for about 13 percent of Ohio’s employment, though mining represents a small fraction of this total—about 2 percent, or 0.25 percent of Ohio’s overall employment.