The economic recovery in Ohio is officially over.

Despite inheriting a State that was both hardest hit and fastest to recover from the Great Recession before he took office, Gov. John Kasich has fumbled the recovery.  As we noted, most the jobs gained since Kasich took office occurred in 2011 and early 2012 before most of his policies took effect.  Naturally, this has lead to the Ohio and national press corps to start speculating on Governor Kasich running for President.

This morning, the July jobs report came out.  The good news? Ohio gained 5,300 jobs with the private sector gaining 9,100 jobs and the public sector losing 3,300.  Job losses in federal and local government outpaced gains in state government.  3,100 jobs were lost in construction last month which has seen 6,300 lost jobs since last July.   Roughly half of the private sector gains last month came from the typically low pay/low benefits leisure and hospitality sector.  Ohio’s job gains in July only erased less than 59% of the jobs lost in June.

That’s all the good news.  The rest is bad news.  Ohio’s unemployment rate stayed at 7.2% as the unemployment rate nationally dropped .2% last month.  The only “miracle” in Ohio’s economic news last month is that Ohio’s unemployment rate didn’t go up.  But over the past twelve months, Ohio’s unemployment rate hasn’t moved.  Like, at all.    And the trendlines over the past months strongly suggest there’s far greater pressure that will drive Ohio’s unemployment rate up than down.

For the THIRD consecutive month in a row, the number of unemployed Ohioans grew.  In July, three thousand Ohioans joined the rank of the unemployed.  That means there are 1,000 more Ohioans unemployed today than there were a year ago.  Although the CES survey of employer’s payrolls showed a gain of 5,300 jobs, the LAUS survey of households (which actually determines the State’s unemployment rate) showed 14,000 fewer Ohioans reported being employed, so there is a disparity between what company payroll records are reporting to what Ohio households are saying.

Ordinarily, this kind of movement would send the unemployment rate up.  Remember when the June report showed Ohio with the second most job losses in the nation?  Remember Kasich spokesman Rob Nichols’ spin was that a positive sign was a 6,000 increase in the number of people in the labor pool?

Yeah, you can forget that.  In July, 11,000 Ohioans dropped out of the labor market even though the number of Ohioans of working age grew by 4,000. So, what little gain we saw in the labor market in June has been erased nearly twice over a month later.  In fact, over the past twelve months, the working age population has grown by 33,000, but the number of Ohioans actively in the labor market (either as employed or people looking for work) has only grown by 6,000.  In other words, only 18% of Ohioans who have increased the working age population in Ohio over the past twelve months have actually joined the labor market either as someone who is employed or looking for employment.   And yes, not only did the labor participation rate drop since last month, but it’s actually lower now than it was twelve months ago.   The ratio of employed Ohioans to the overall working population was smaller last month than it was a year ago, too.

All in all, this morning job report for July was far more negative than positive.  When looking at the totality of the data, there are more Ohioans unemployed today than a year ago.  A smaller percentage of Ohioans are working or looking for work today than a year ago, and those that are looking for work are having a harder time finding it.  These are signs that Ohio’s has so much “slack” in it (i.e.- discouraged Ohioans who have stopped looking for work) that it has kept Ohio’s unemployment rate artificially low.  The troubling sign is building, not decreasing.

Ohio’s unemployment rate has gone up .5% over the course of the year so far.  And most indications are the only thing that has kept it from going higher is that the rate of people dropping out of the labor market has outpaced the increase in people who have become unemployed.   Over the course the year, 13,000 more Ohioans have become unemployed and there are 15,000 fewer Ohioans employed so far.  Since the end of 2012, Ohio’s employment situation has not stagnated, it’s gotten worse.  Undeniably worse.

It’s  hard to ignore these statistics or the inevitable, but regrettable conclusion, the recovery in Ohio has officially gone from stalled this year to ended.  Governor Kasich has been arguing that his “Ohio Model” is working.  Perhaps it’s working for his presidential ambitions as the national punditry swoons, but it’s not working for Ohioans.  John Kasich, he just didn’t get the job done.

 

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