Is the recent rise in Ohio’s unemployment rate signaling deterioration in the state’s labor market conditions? Not necessarily, says Cleveland Fed researcher
Ohio’s unemployment rate rose half a percentage point in the six months ending in April, increasing from 4.7 percent to 5.2 percent. Looking at data for Ohio back to the mid-1970s, Federal Reserve Bank of Cleveland vice president and senior regional officer Guhan Venkatu finds that a six-month increase in the unemployment rate of the magnitude Ohio has witnessed recently has tended to occur around US business cycle turning points.
But Venkatu says it’s too early to conclude that a downturn is imminent. “While increases in the unemployment rate can be a good predictor of economic conditions to come, the national unemployment rate continues to decline and many other indicators, including anecdotal reports from our District contacts, point to ongoing moderate growth in the economy,” says Venkatu.
The researcher says the recent increase in Ohio’s unemployment rate could be the result of more people entering the labor force because they believe their likelihood of securing jobs has improved. But he also notes that increases in the labor force over the six-month periods ending in April and May—the largest increases in any six-month period since the mid-1970s—may not survive subsequent data revisions. In general, Venkatu says that it’s important to be cautious in interpreting Ohio’s unemployment rate data because an annual revision process often changes the data in significant ways.
Read State of the State: Ohio in Forefront.
Also, check out our latest Metro Mix reports on economic conditions in Ohio’s three largest cities: Cincinnati, Cleveland, and Columbus.
Federal Reserve Bank of Cleveland
The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.
The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.
Doug Campbell, email@example.com, 513.455.4479