SMALL POSITIVE SIGNS OF ECONOMIC PROGRESS HERE

Submitted by Roldo on Thu, 10/15/2009 - 14:41.

Some positive signs of easing of unemployment in Ohio are reported by analyst George Zeller today. However, job losses continue.

 

Columbus – something we usually don’t expect – has been having a harder time with new unemployment problems than northeast Ohio and other parts of the state, according to Zeller.

 

The rate of job losses, however, has slowed for Ohio and the U. S. during July, August and September if anyone is looking for some sunlight in the darkened economic skies.

 

He says “Stunningly, the report finds that the very high current level of unemployment claims is not concentrated primarily in Cuyahoga County or Northeastern Ohio. Ohio’s most elevated levels of new unemployment claims  in comparison to the last year when the state experienced job growth in 1999 are now currently taking place in metro Columbus. Cincinnati has the second most elevated levels in the new data…”

 

 

But maybe the unfortunate part is that this area has been hit so hard in the past that we can’t lose much more.

 

Here is Zeller’s entire report.

 

 

 

Since it is Thursday, we have an updated measure of the level of new unemployment claims in Cleveland-Akron-Lorain-Elyria and in Ohio. Today's new data are for the second week in October, and thus the second week of the fourth quarter of 2009. The newly updated full report is now available on the internet at:

http://www.nacs.net/~georgez/newclaims101009.pdf

Columbus has again exceeded Cincinnati and as the Ohio urban metropolitan area with the most elevated level of new unemployment claims above normal "job growth" levels at this time of year.

Unfortunately, 81 of Ohio's 88 counties still have current levels of new unemployment claims that exceed their 1999 "job growth" levels. The counties of metro Columbus have again passed Cincinnati, Toledo and Canon for the unfortunate distinction of the most elevated current levels of new unemployment claims among all Ohio urban regions. The second highest levels of elevated job loss are in Cincinnati. Toledo has the third most elevated levels of new claims among Ohio's urban areas, with Canton ranking fourth. In metro Columbus current levels of new unemployment claims remain more than triple a normal "job growth" level.  These rankings are relative measures, since virtually the entire state in 81 counties is still currently suffering job destruction from layoffs.

The least elevated levels of current new unemployment claims are in Cleveland-Akron-Lorain-Elyria, but even there, current layoff levels are substantially more than double normal "job growth" levels in all counties except Lorain. Layoffs are still increasing in comparison to last year's 2008 levels in all seven counties within the region, including Lorain.

Only seven Ohio counties have lowered their current 2009 layoff levels to "job growth" 1999 levels. This week those seven counties are Darke (Greenville), Lorain (Lorain), Mercer (Celina), Erie (Sandusky), Huron (Norwalk), Hocking (Logan), and Lawrence (Ironton).

The apparent good news in Lorain, Sandusky, and Norwalk is tempered by the fact that those counties experienced very large pre-recession layoffs in mid-October 1999 in association with the automobile industry. Those large and unusual layoffs in 1999 distort this week's data.

These data are important since they will be the first indication that is available when the ongoing Ohio recession finally ends. That did not happen in the new data. Instead, the number of layoffs in Ohio continues to increase through mid-October 2009. The new data indicate that Ohio is still losing jobs, not gaining them, even through the second week of October. This makes it highly unlikely that there will be a rebound in the tax revenue collections within the state of Ohio during forthcoming 2009 months.

These data unfortunately are similar to very unfavorable figures seen in earlier weeks of August, September, October, November, and December 2008 as well as January, February, March, April, May, June, July, August, September, and October 2009 weeks. This week's new figures remain unambiguously in the deep recession range for layoff levels. This means that both Cuyahoga County, Cleveland-Akron-Lorain-Elyria and Ohio are still losing employment during through the second week of October 2009. The same unfortunate situation is evident in the entire United States, where data for the new week show continued job destruction in the United States.

There is one positive sign in the layoff figures for the new week. It is clear that the rate at which layoffs are increasing slowed during July, August, and September in both the USA and in Ohio. That declining rate of increase is also evident for the first two weeks in October. Thus far in October, Ohio's new unemployment claims actually fell in comparison to the first two weeks in October 2008. But, two weeks of data are not a significant trend in the volatile data on new unemployment claims, so we await data for further October weeks before the data measure a statistically meaningful trend in the fourth quarter. Ominously, the four week moving average of new unemployment claims continues to increase by 2% between the second week of October 2008 and the second week of October 2009, indicating that the trend for the first two weeks of October may not be genuine. Nevertheless, the rate at which Ohio layoffs are increasing slowed substantially during the summer, and it continues to slow during the early fall. In Ohio the level of elevated layoffs over normal "job growth" levels still indicates that Ohio lost jobs throughout 2009, despite some slowing of the rate of increase during recent weeks.

Stunningly, the report finds that the very high current level of unemployment claims is not concentrated primarily in Cuyahoga County or even in northeastern Ohio. Ohio's most elevated levels of new unemployment claims in comparison to the last year when the state experienced job growth in 1999 are now currently taking place in metro Columbus. Cincinnati has the second most elevated levels in the new data, with Toledo ranking third. Cleveland-Akron-Lorain-Elyria actually has Ohio's least elevated levels of new unemployment claims above normal "job growth" levels.

But, some of that favorable news was caused by the distortion in this week's data for Lorain County.

The level of new unemployment claims increased at a rising pace during all four quarters of 2008, from 6% in the first quarter to 19% in the second quarter, 47% in the third quarter, and 56% in the fourth quarter. During the first quarter of 2009, the rate at which layoffs are increasing soared with a 96% statewide increase over last year's figures for the first quarter of 2008.  The data for the second quarter of 2009 indicated an increase of 94% in Ohio's new unemployment claims in comparison to the same figures during the second quarter of 2008. During the third quarter of 2009, new unemployment claims increased by a much slower 21.5%. The slowing of growth in new unemployment claims during the third quarter is a highly welcome development. That slowing continued into the first two weeks of October 2009, but there are not yet enough weeks of data available to provide a reliable measure of fourth quarter 2009 trends. Although the soaring rate of growth in Ohio new unemployment claims has slowed significantly, the number of new claims is still growing on a statewide basis, albeit more slowly.

Once again, this week's report contains expanded data on the 1999-2009 trend in the current four week moving average of new unemployment claims for all 88 Ohio counties, not just the seven counties of Cleveland-Akron-Lorain-Elyria. The new data find that the ongoing Ohio labor market recession is literally statewide in its scope. The current four week moving average exceeds 1999 "job growth" levels in 81 of Ohio's 88 counties. The seven exceptions that have reached their 1999 "job growth" level are Darke, Lorain, Mercer, Erie, Huron, Hocking, and Lawrence. The good news in Lorain, Erie, and Huron Counties is mainly a statistical distortion caused by unusual large pre-recession layoffs in those counties in 1999.  All of Ohio's large urban metropolitan areas currently are experiencing new unemployment claims at extraordinarily high levels. The literally statewide scope of the deep ongoing recession has made it very difficult for Ohio to recover from the recession, given the impact of the ongoing USA national recession.

In the new data, Holmes, Delaware, Shelby, Pickaway, Coshocton, Van Wert, and Union Counties currently hold the unfortunate distinction of Ohio's worst elevated current levels of new unemployment claims above their normal pre-recession 1999 "job growth" level. Current new claims for unemployment are currently more than four times higher than a normal 1999 "job growth" level in all seven of these counties. Surprisingly, current levels of new unemployment claims are more than four times higher than a normal level in rapidly growing counties such as Delaware and Warren in suburban Columbus and Cincinnati. The extraordinarily high levels of new unemployment claims in counties that have been among the state's fastest growing counties is an unfortunate finding that the depth and scope of the ongoing Ohio recession continues to be alarmingly deep and broad.

The data for the new week were once again discouraging in the USA nationally, and they were once again quite unfavorable in Ohio. The level of new claims in Cuyahoga County remained disturbingly high in the new week. Both Cuyahoga County, Cleveland-Akron-Lorain-Elyria, and Ohio on a statewide basis are still showing very high levels of new unemployment claims that are consistent with current job losses, not job growth. The national four week moving average fell below the extremely high level of 600,000 for the 14th consecutive week following 23 consecutive prior weeks above the  frighteningly high 600,000 level. The 600,000 level was high enough to create extremely serious concern. Therefore, the USA figure of 531,500 was among the only "good" news in this week's data on new unemployment claims. But, the new week is the 63rd consecutive week that the national figure on new claims has exceeded 400,000 during the 2008-2009 national recession. The last week of July 2008 and all weeks of August, September, October, November, and December 2008 saw weekly new claims exceeding 400,000 that is widely agreed to be a "rule of thumb" indicating a national recession. The same situation remained in place during all weeks of January, February, March, April, May, June, July, August, September, and October 2009. The 63 weeks in a row over 400,000 in the four week moving average of national new claims for unemployment make it certain that the USA labor market is still in a deep national labor market contraction. Both the Ohio and the USA labor markets were clearly in recession throughout 2008, and they remained clearly in recession during the first 41 weeks of 2009 as well.

At this time of year the number of weekly new claims for unemployment in Cuyahoga County should be less than 1,000. This week's figure is 1,691, a level still well above the normal 1,000 rule of thumb that measures a recession in Cuyahoga County. It increased by 10% in comparison to last year's very high figure. The Cuyahoga County figures remain at a high level that measures additional job losses in Cuyahoga County last week.

Ohio's 15,594 new unemployment claims for the second week of October are at a level now 89% higher and nearly double a "job growth" level of 8,246 that is normal at this time of year during economic growth periods. The seven county Cleveland-Akron-Lorain-Elyria regional total is also currently 89% higher than its pre-recession 1999 level, clearly indicating a deep recession in the regional labor market. The problem of very recent job destruction clearly extends well beyond Cuyahoga County and across the entire state of Ohio. In Ohio, 81 of the state's 88 counties have a current four week moving average that exceeds the normal 1999 "job growth" level.

Last week in Cuyahoga County there were 1,691 new unemployment claims, a level 105% higher and more than double what it should be at this time of year if the economy were generating employment growth. The figures were horrible during all August, September, October, November, and December 2008 weeks. The figures for the months of January, February, March, April, May, June, July, August, September, and October 2009 have also been quite unfavorable. These very high layoff levels make it certain that Ohio's employment total is currently declining as a result of job destruction caused by the recession, even during mid-October 2009.

The level of new unemployment claims increased at a rising pace during all four quarters of 2008, from 6% in the first quarter to 19% in the second quarter, 47% in the third quarter, and 56% in the fourth quarter. During the first quarter of 2009, the rate at which layoffs are increasing soared with a 96% statewide increase over last year's figures for the first quarter of 2008. That rate of layoff growth during the first quarter of 2009 exceeded even the large and accelerating figures for the four earlier quarters of 2008. During the second quarter of 2009, new unemployment claims increased by 94% in Ohio's new unemployment claims in comparison to the same figures during the second quarter of 2008. During the third quarter of 2009, new unemployment claims in Ohio showed a 21.5% increase in comparison with the third quarter of 2008. While still an increase, the slowing rate of increase in new unemployment claims across Ohio was the main favorable news in this week's new data. An actual two week decrease during the first two week of the fourth quarter will be insignificant until more fourth quarter weeks are available. The four week moving average continues to increase 2009-2009, contradicting the insignificant decline during the first two weeks of October 2009.

Layoffs at this level in early October are still considerably exceeding the very high level that Ohio suffered in 2001 as the national 2000s recession reached its greatest job destruction velocity in Ohio. There is still no sign this week of a recovery in the economy, either at the local, state, or nationwide levels.

Another highly discouraging figure is that the national four week moving average of new unemployment claims has now exceeded 400,000 for 63 consecutive weeks, a period exceeding two full quarters.  That indicates with certainty that the national labor market is in a very deep recession. The Current Employment Statistics measured job losses in the USA during all twelve 2008 months and also in January, February, March, April, May, June, July, August, and September 2009, further reinforcing the conclusion that the national labor market in the USA remains in a deep recession period. The new 2007-2009 recession was finally declared official by the National Bureau of Economic Statistics last November. The USA new unemployment claims exceeded the alarmingly high level of 600,000 for 23 consecutive weeks until declining below that level for 14 consecutive weeks.  This week's new level of 531,500 is a decline of 9,000 below last week's level. The national level of new unemployment claims remains under 600,000.  A level above 600,000 national new unemployment claims per week signifies a very deep national recession, not just a recession. Levels over 500,000 also signify a deep national recession. The first fourteen weekly drops below 600,000 in several months have been favorable news in the layoff trend data, but the figure for national new unemployment claims remains substantially above both 400,000 and 500,000. Until the figure falls below 400,000, the new unemployment claims will still be measuring a national recession.

The fact that 87 of Ohio's 88 counties experienced a year to year increase in their new unemployment claims during the first 41 weeks of 2009 relative to the first 41 weeks of 2008 is highly troubling. The current economic weakness is by no means restricted to Cuyahoga County in Ohio. Instead it is literally spread across the entire state of Ohio, with Guernsey County being the only exception among the counties. Guernsey and 81 of the 88 Ohio counties had more new unemployment claims last week than is normal at this time of year during periods of job growth.

Therefore, we unfortunately have no evidence in the new data that the Ohio labor market has finally hit a trough low point from the 2000s recession.  To the contrary, the data indicate that Ohio is still losing jobs at a very rapid rate, not gaining jobs, throughout 2008 and 2009 including the newly available data for the first 41 weeks of 2009. We will continue to follow these very fresh indicators until such time as Ohio finally starts to recover from the 2000s recession. That happy day has not yet arrived, given the highly unfavorable and level of layoffs in both Cuyahoga County, Ohio, and the United States last week. The current labor market recession remained in place in today's new weekly data within 81 of Ohio's 88 counties. The rate at which the recession is deepening has slowed noticeably, but the Ohio labor market certainly remains in recession through data for mid-October 2009 on a statewide basis.

The fact that Ohio's most elevated levels of new unemployment are currently located the Columbus metropolitan area remains highly unusual. The fact that current elevated new unemployment claims are also more than double a normal "job growth" level in all Ohio urban areas except Cleveland-Akron-Lorain-Elyria also remains troubling. But, continued economic decline in Ohio's normally growing cities remains a key factor that is sustaining the depth of the current recession in the Ohio labor market. While new unemployment claims remain more than double normal levels in six of the seven counties of Cleveland-Akron-Lorain-Elyria, the currently elevated levels of new unemployment claims are higher in all of Ohio's other urban regions than they are in Cleveland-Akron-Lorain-Elyria.



George Zeller, Economic Research Analyst
Cleveland, Ohio
(216) 941-3366
http://www.nacs.net/~georgez/homepag2.htm

 

 

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