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Summary
In newly released data from the Ohio Department of Jobs and Family Services and the US Department
of Labor, the state of Ohio gained 8,400 jobs in October 2010. The estimated gain in Ohio employment
during 2010 increased to 24,500 jobs in the new figures, given the preliminary estimated September
job increase, following prior losses in August and September. Ohio’s loss of jobs during the twelve
months of 2008 was 167,900. Ohio’s job loss during the twelve months of 2009 was 255,400 jobs.
Since the national recession started in December 2007, Ohio has lost a gigantic 398,800 jobs, or -7.4%
of the state’s employment in only 35 months. Thus far during the first ten months of 2010, Ohio has
gained 24,500 jobs, although that estimate is subject to future revision. This report finds that those
future downward revisions are absolutely certain, so the October estimates for Ohio employment
must be considered preliminary overestimates. The Ohio employment increase in 2010 is very
welcome, but it is misleading for multiple reasons. Ohio’s less reliable unemployment rate estimate
decreased slightly from 10.0% in September 2010 to 9.9% in October 2010, mainly caused by an
estimated decrease of 8,000 workers who left the Ohio labor force in October. On a year over year
basis, Ohio’s horrible streak of consecutive months was stopped on a preliminary basis at 172
consecutive months in July 2010. But, a new streak was extended in October to 3 consecutive
months.
The new data for October 2010 show Ohio’s job growth during the past year at a gain of 0.1%
while job growth in the USA was an increase of 0.5% during the past year. This discouraging
figure extended another streak where Ohio’s job growth is below the USA national average. That
new streak is now 3 consecutive months. Ohio’s horribly lengthy streak of consecutive months
when Ohio’s job creation had been slower than simultaneous job creation in the USA was stopped
in preliminary July data at 172 consecutive months with Ohio’s job growth being below the
national average. This had been the longest sub-par job growth streak for Ohio in the history of
job statistics in the United States. But, that horrible streak was stopped on a preliminary basis in
July 2010, subject to certain future revisions in the data. Ohio’s year over year job growth had not
exceeded the United States average in any month between March 1996 and June 2010. But, the July
job growth in Ohio brought that lengthy streak to an end on a preliminary basis. The July 2010 Ohio
job estimate was preliminary and was somewhat misleading. The previously released April 2010
job estimate for Ohio was revised very sharply downward by -64,500 jobs on a not seasonally
adjusted basis in May. In the July job estimates for Ohio, the previously released May 2010 job
estimate for Ohio was revised downward by 2,100 jobs. The previously released June 2010 job
estimate for Ohio was also revised downward by 4,000 jobs. That recent collection of downward
revisions to Ohio job estimates from the Current Employment Statistics survey underscore the
preliminary nature of the new August 2010 job estimate.
In addition, this report finds that the Current Employment Statistics estimates for October,
November, and December 2009 overestimated Ohio employment by more than 85,000 jobs. It is
known from the Quarterly Census of Employment and Earnings complete count of Ohio jobs
that the fourth quarter estimate for Ohio jobs in the Current Employment Statistics and the
ODJFS Labor Market Review has overestimated Ohio employment by about 85,400 jobs.
Therefore, monthly estimates for Ohio employment in CES from the US Bureau of Labor
Statistics and ODJFS are inflated by more than 85,000 jobs that do not exist. The monthly
figures will be revised downward early in 2011, but until then the monthly Ohio employment
estimate is known with certainty to be an overestimate. Thus, the end of the lengthy Ohio sub-
par job growth streak is highly uncertain, pending the known forthcoming large downward
revisions in a couple of months.
Given the confusing small unemployment decline and small employment increase in the new October
2010 estimates, the new data do not clearly measure a trough low point from the 2000s recession in
Ohio, given the technical quirks in the third and fourth quarter 2010 preliminary estimates. But, the
data also show that the speed of Ohio job losses from the 2000s recession decreased substantially
during the fourth quarter of 2009 and that Ohio actually gained jobs during the first ten months of
2010, a highly welcome development. The state continued to lose jobs during the fourth quarter of
2009, albeit at a slightly slower pace than it had been losing jobs earlier in 2009. The small estimated
gain of 6,400 Ohio jobs during the first quarter of 2010 was the first optimistic sign found in the
Current Employment Statistics for several years. The preliminary estimated Ohio job growth of
40,200 during the second quarter of 2010 is yet another encouraging sign, even though that
figure is certain to be revised downward later by a large amount. The new estimate of a -30,800
job loss in Ohio during the third quarter 2010 is quite discouraging. But, after the technical
quirk of certain large downward revisions to the 2010 estimate is considered, it is actually not
known with certainty and precision how many jobs Ohio has at the present time. The
preliminary estimate of a job gain of 8,400 during the first month of the fourth quarter of 2010 is
also an optimistic sign. But, despite the slightly positive new October figures, there is still no
unambiguous evidence that the 2000s recession has ended yet in the Ohio labor market, despite
some slightly optimistic signs in preliminary estimates for the four quarters of 2010.
Neither the positive October 2010 unemployment decline nor the negative large loss in estimated Ohio
employment for August and September and then an employment increase in October are
unambiguously consistent with highly elevated levels of new claims for unemployment that the state of
Ohio suffered during all weeks of April, May, June, July, August, September, October, and November
2010. (The previously estimated large loss of Ohio jobs in September was revised upward by 300 jobs
in preliminary October data that has just been released). That fact mandates additional caution
during the interpretation of the Current Employment Statistics preliminary monthly estimates
for 2010 in Ohio. In addition, the cause of the overestimate of Ohio employment is known. A new
“birth-death” model of startup firms in the economy was added to the Current Employment Statistics
estimates in the United States by the US Bureau of Labor Statistics in 2009. That model
catastrophically failed in 2009, and it substantially overestimated United States and Ohio employment
in 2009. In January 2010, the data were revised during an annual rebenchmarking process that
compares the CES survey results to the Quarterly Census of Employment and Earnings complete count
of jobs in the USA. That resulted in the largest downward revisions in history to the Current
Employment Statistics data, as this report documents. The wildly inaccurate “birth-death” model of
new firms is catastrophically failing once again in 2010. A similar large downward revision to 2010
Ohio job figures that will exceed -85,000 jobs is certain in January 2011. The US Bureau of Labor
Statistics has released its preliminary estimate of a forthcoming downward revision to the Current
Employment Statistics estimate of USA employment. That BLS estimate is that CES is overestimating
USA employment in 2010 by 366,000 jobs. A large downward revision of -366,000 jobs will be made
in early 2010 to the USA preliminary employment estimate. Thus, the accuracy of the ODJFS monthly
employment preliminary estimates is currently not as good as it normally is, since the monthly
estimates are certainly overestimates until the forthcoming 2011 downward revision is made.
The 2000s recession has now lasted for more than nine years in Ohio’s labor market. During 2008,
Ohio lost 167,900 jobs, an employment decline of -3.1%. During 2009, Ohio’s loss if 184,900 jobs was
a percentage decline of -4.9% in Ohio’s employment. The new data for October 2010 indicate that the
speed of Ohio job losses slowed somewhat during the fourth quarter of 2009 and that the job losses
ceased entirely during both the first and second quarters of 2010. But, the estimated job losses resumed
during the third quarter of 2010 with a loss of -30,500 jobs in Ohio. The new preliminary figure for the
first month of the fourth quarter finds an estimated increase of 8,400 jobs in Ohio. But, given these
unfortunately very negative technical factors, the new data do not yet definitively measure a trough in
the lengthy 2000-2010 recessionary job loss period in Ohio’s labor market. That is particularly true
because in a highly negative development, the ODJFS preliminary estimate of Ohio job growth
during the third quarter of 2010 measures a substantial loss of -30,500 Ohio jobs. That loss will
at least double when the downward revisions are made to the 2010 preliminary Ohio job
estimates in early 2011.
Very discouraging and alarming technical news on Ohio job estimates linger from the very large
downward revision to previously released employment estimates for numerous prior months by ODJFS
and the Bureau of Labor Statistics early this year. Estimates for all prior months since March 2008
were revised downward in both Ohio and in the United States in the February 2010 data series. For the
last two years, both ODJFS and the US Department of Labor had been underestimating the size of the
job losses during the 2007-2010 recession every month. The size of the annual downward revision was
much larger than had been predicted in previous months in this Economic Indicators report. For
instance, December 2009 job estimate in Ohio was resided downward by -79,500 jobs. The largest
monthly downward job revision was the -92,900 job downward revision to July 2009. The national
revisions to the USA job estimates were downward by more than -1 million jobs during all months
between May 2009 and December 2009. This revision is made every year by a comparison of the
monthly Current Employment Statistics estimate to the actual complete count of jobs for Ohio
counties in the Quarterly Census of Employment and Wages. The revisions to 2009 months
represented the largest downward revision in the history of job statistics, both in Ohio and in the
United States as a whole. That issue reinforces the need to treat the preliminary October 2010
estimate as preliminary, since it in fact is subject to certain future revision. It will in fact be
downwardly revised by more than -85,000 jobs. Since the misleading “birth-death” model of firms
continues to inflate the USA and Ohio monthly job estimates, it is certain that next year’s revisions
will also be downward revisions during all four quarters of 2010, despite the small employment
increases in Ohio in 2010 that are suggested by the preliminary pre-revision estimates.
In other discouraging technical news, the estimated job gain of 15,800 in Ohio during the first nine
months of 2010 came despite elevated levels of new unemployment claims during all weeks of 2010
thus far. The data on new unemployment claims make it certain that Ohio experienced additional job
destruction during all nine months of the first, second, and third quarters of 2010 and during the first
seven weeks of the fourth quarter of 2010. Therefore, all of the 30,500 jobs gained in Ohio during
2010 will certainly be eliminated during future downward revisions to the preliminary data.
Given the enormous uncertainties in the July, August, September, and October 2010 Ohio
employment estimates, the wonderful end to Ohio’s long streak of 172 consecutive months with
the state’s job growth below the USA national average in July must also be considered to be
preliminary and tentative, subject to future large revisions in the data. Further, in October 2010,
Ohio extended a new streak to three months with Ohio’s job growth below the USA national
average.
Definitions
Employment is measured in this report by the Current Employment Statistics series released monthly
by the Ohio Department of Jobs and Family Services and the United States Department of Labor.
These data are generated by a very large sample survey of firms. The coverage by industry in this
sample is variable, but it is particularly reliable for manufacturing firms. Further, on an annual basis,
the Current Employment Statistics are revised on the basis of trends in the QCEW complete count of
employment and earnings. Therefore, current monthly data are always subject to revision, but data for
prior years are quite accurate and stable.
Job growth in both Ohio and in the United States is measured by the percentage change in employment
in comparison to the figure in the same month of the prior year. Data are from the Not Seasonally
Adjusted Current Employment Statistics series, which avoids seasonal adjustment difficulties over
time. This CES series is available for all months since the end of the Great Depression in the United
States. Monthly data on annual employment growth are available for both Ohio and the United States
since 1940.
For many decades, the industrial structure of Ohio has been very similar to the industrial structure of
the United States as a whole. As a result, patterns in the business cycle in Ohio have paralleled national
patterns in the business cycle. During the 1940s, Ohio’s job growth exceeded the national average
during 70 percent of all months of that decade. In subsequent decades, Ohio’s job growth was less
robust in comparison with national trends. Ohio’s job growth generally paralleled national job growth
during the 1950s, and the 1960s. This pattern vanished during the 87 months between September 1977
and December 1985. Ohio’s job growth rate was below the national average for all 87 months of the
period between September 1977 and December 1985. These 87 months coincided with the very severe
double dip recession of the 1979-1983 period. Those two national recessions were unusually severe in
Ohio. Large and continual losses Ohio’s manufacturing job base rippled through the rest of the Ohio
economy during this four year period of the late 1970s and early 1980s.
Following the severe 1979-1983 recessions, Ohio returned to extended periods of job growth in
parallel with the national business cycle. But, that pattern ended in March 1996. In February 1996,
Ohio’s job growth exceeded the rate of job growth in the nation during that month. During March
1996, in a development little noticed at the time, Ohio’s job growth was slower than the national
average. This unfortunate pattern of sub-par job growth continued for every single month of all years
since then through June 2010. Ohio did not experience even one month of above average job growth at
any time between March 1996 and June 2010. That lengthy sub-par job streak, which reached all
months during 14 years and four additional months, had been the longest period of below average job
growth in the history of Ohio. But, that streak was fortunately stopped on a tentative and preliminary
basis in July 2010. A new streak started in August 2010, and was extended in September and October
2010.
The Data
In the most recently available figures for October 2010, Ohio’s job growth rate during the year since
October 2009 was slightly positive, with 0.1% growth from an estimated small increase of 7,500 jobs.
In October 2010, the simultaneous rate of job growth during the year in the United States was a small
increase of 0.5% from a gain of 626,000 jobs. Ohio lost jobs on a seasonally adjusted basis during the
third and fourth quarters of 2007. The state experienced a seasonally adjusted job loss of 27,000 during
the first quarter of 2008. Seasonally adjusted, Ohio’s monthly job growth figure during the second
quarter of 2008 was a loss of 14,200 jobs. During the third quarter of 2008 Ohio lost 41,400 jobs. That
was followed by a very large loss of 85,300 Ohio jobs during the fourth quarter of 2008. Given job
losses during all four quarters, Ohio’s net seasonally adjusted job growth during 2008 was a large loss
of 167,900 jobs. Ohio experienced no labor market recovery during 2008 from the 2000s recession. To
the contrary, the rate of job loss in Ohio accelerated during 2008. During 2009, Ohio lost 105,300 jobs
during the first quarter of 2009. The state’s job losses totaled 102,300 during the second quarter of
2009 and 31,400 during the third quarter of 2009. Revised final figures show that Ohio lost 16,400 jobs
during the fourth quarter of 2009. The 167,900 jobs that Ohio lost during 2008 and the additional
255,400 jobs that Ohio lost during 2009 created severe human suffering for hundreds of thousands of
additional Ohio workers and their families. The catastrophic plunge in Ohio employment finally ceased
during the first quarter of 2010, when Ohio gained 6,400 jobs. The speed of Ohio job losses began to
slow late in 2009 and actually stopped in preliminary figures for the first quarter of 2010, which
estimate that Ohio gained 6,400 jobs during 1Q 2010. During the second quarter of 2010 Ohio gained
40,200 jobs in preliminary estimates. During the third quarter of 2010, Ohio lost 30,500 jobs. The
preliminary estimate for the first month of the fourth quarter of 2010 is that Ohio gained 8,400 jobs
thus far during 4Q 2010. Thus, during the first ten months of 2010, Ohio has gained 24,500 jobs in the
preliminary estimates. Unfortunately, that current 2010 preliminary estimate is certain to be
downwardly revised later by more than -85,000 jobs, an amount larger than small increase for
2010 in the preliminary estimates. Despite the apparent good news in the 2010 Ohio employment
estimates, it is still true that since the national recession started in December 2007, Ohio has lost a
gigantic 400,400 jobs, or -7.4% of the state’s employment in only 35 months.
June 2010 was the 172nd consecutive month when Ohio’s job growth was below the national
average. This was by far the longest streak of sub-par Ohio job growth in the history of job
statistics in Ohio and in the United States. This horrible and very troubling sub-par job growth
streak had been extended during every month for 14 consecutive years and four additional
months.
In preliminary July 2010 data, Ohio’s job growth during the past year was estimated as a job
increase from growth of 0.15%. Comparable data for the United States during the July 2009
through July 2010 period measure a national employment increase of 0.08%. The state’s lengthy
record breaking sub-par job growth streak was therefore finally broken in July 2010, at least on
a preliminary basis. It will remain to be seen if the streak returns after the forthcoming large
downward revisions to the monthly Ohio and USA job estimates in the Current Employment
Statistics that will be made early in 2011.
But, in preliminary October 2010 data, Ohio’s year over year job growth was a small gain of
0.1% while the USA’s year over year job growth in October 2010 was a small gain of 0.5%.
Thus, at least on a preliminary basis, the July 2010 breaking of the lengthy fourteen year sub-par
job growth streak was a one month phenomenon. A new sub-par job growth streak in Ohio was
extended in preliminary September 2010 estimates, with that new streak consisting of three
months.
The United States first registered job growth during a recovery from the 2000s recession in December
2003. Ohio’s labor market recovery began later during March 2004. But, Ohio’s extremely weak
recovery was well below rates of simultaneous recovery that were registered in the United States.
During half of the twelve months of 2006, there was no job growth at all in Ohio as the state lost
10,400 jobs despite a national economic recovery from the 2000s recession. During 2007 Ohio
suffered a small job loss of 7,100. In a year to year comparison, Ohio lost jobs during all 2007 months
except January. The United States experienced small year to year job gains during 2007 while Ohio
experienced a year over year employment decline.
Then, during 2008, Ohio suffered year over year employment losses during all months except January
and April. The entire United States also lost employment during all 2008 months as a result of the
2008 national recession. The year over year job growth figure in the United States for December 2008
was a -2.6% loss. Ohio’s year over year loss between December 2007 and December 2008 was a loss
of -3.1%. Ohio’s year over year rate of job loss during all months of 2008 was worse than the rate of
the USA loss, despite the fact that the United States rate of job loss accelerated rapidly during the last
four months of 2008.
Large downward revisions to the monthly job estimates were predicted in this Economic Indicators
analysis within this report during several prior months. Major revisions to the Current Employment
Statistics are made every year through a comparison of the monthly Establishment Survey of USA
firms and the QCEW complete count of jobs. The annual revision via rebenchmarking the job
estimates from the Current Employment Statistics survey to more accurate and precise figures from the
Quarterly Census of Employment and Earnings in all Ohio counties was performed when data for
February and March 2009 were released. That downward revision was -92,900 jobs in June 2009, the
largest such downward revision in Ohio history. The same revision to United States nationwide jobs
exceeded -1 million jobs, also the largest downward revision for national employment in history. The
monthly downward revisions generally are in the range of 80,000 jobs in Ohio. Therefore, the
staggering depth of the 2000s recession was much deeper than had previously been estimated by both
ODJFS and the US Department of Labor. As a result, Ohio’s job loss figures were far more
discouraging in the downwardly revised data than they had been in reports released during prior
months in 2009.
OHIO USA
SIZE OF SIZE OF
MONTH PRELIM REVISED REVISION PRELMINARY REV REV
The sub-par job growth performance in the state of Ohio has been both an acute and chronic problem
in the state, as job growth failed to provide sufficient employment and earnings for all Ohio residents.
This has been true during both recessions and recoveries. During recoveries Ohio’s employment
growth has been weaker than simultaneous growth in the rest of the United States. During recessions,
Ohio has lost jobs more rapidly than the rest of the nation has lost jobs. This continuously weak job
growth has been a direct cause of Ohio’s weak population growth. The situation certainly has been
among the most urgent unsolved problems that has confronted the state of Ohio.
The rate of job loss in both Ohio and in the United States had been slowing during recent months, but
this slowing job loss rate has not yet resulted in an unambiguous sign of labor market recovery from
either the 2007-2010 national recession or the 2000-2010 Ohio labor market recession. That continuing
labor market contraction has made Ohio’s subpar job growth problem more urgent and acute. Positive
signs in March, April, May, June, July, and October 2010 have been very welcome, but they will
be downwardly revised by a very large amount exceeding -85,000 jobs during the annual
comparison to the Current Employment Statistics survey estimates in early 2011. That future
downward revision is absolutely certain for most 2010 months that have been released. In
addition, Ohio lost 32,100 jobs in the preliminary unrevised estimates for August and September 2010.
A small preliminary estimated increase of 8,400 jobs in October did not make up for the losses during
the two previous months.
Therefore, the very good news that Ohio’s horrible lengthy sub-par job growth streak was stopped in
July 2010 unfortunately is preliminary, pending certain future large downward revisions to the Ohio
job counts for all 2010 months. The USA job estimates will also be revised at the same time, so the
stopping of the horrible streak will be preliminary until downwardly revised 2010 data are released
early in 2011.
On a short term basis, the new October 2010 employment figures for Ohio appear to be positive, but
they are actually quite weak. The volatile and often unreliable Ohio unemployment rate estimate
declined from 10.0% in September to 9.9% in September, largely because of a decline of -10,000
unemployed workers during September. At the same time, the preliminary Current Employment
Statistics estimates of Ohio employment measured a simultaneous substantial decrease of -8,000
workers in Ohio during September. An increase in the number of discouraged workers who left the
Ohio labor force is not a sign of strength in the state’s economy. Obviously the degree of measurement
precision in both the job estimates and the unemployment estimates is not sufficient to draw a firm
conclusion from either figure this month. But, in addition to the large impact of data revisions to
numerous prior months and quarters, it is certain that the employment figures will be subject to even
larger downward revisions in early 2011. It is known with certainty from already available figures in
the Quarterly Census of Employment and Wages complete count of Ohio jobs that the forthcoming
downward revision will exceed -85,000 Ohio jobs, a revision that will completely obliterate the
preliminary estimate that Ohio has gained 24,500 during the period between January and October
2010.
Manufacturing fortunately saw an Ohio employment increase of 600 in October 2010, while
Construction also registered a small gain of 600 jobs in October 2010. The blue collar job increases in
Ohio during the last three months followed gigantic previous losses from the 2000s recession. Neither
the August 2010 data, the September 2010 data, nor the October 2010 data measure a clear
employment trough from the 2000s recession and a resumption of employment growth in Ohio,
given the very large forthcoming downward revisions to the data.
Despite the small gain of 6,400 jobs during the first quarter of 2010, during the twelve months of 2009
Ohio lost a very large 255,400 jobs. That loss followed a very large loss of 167,900 jobs during 2008
in Ohio. The preliminary estimated increase in Ohio employment during the first ten months of 2010
of 24,500 jobs is a substantial reduction from what had been estimated through July 2010 as Ohio job
growth. Given the small size of the 2010 employment increase in Ohio, which is still dwarfed by both
the massive size of the 2008 and 2009 job losses in Ohio, and which is also dwarfed by the certain fact
that a downward revision exceeding -85,000 jobs will be made to the large majority of 2010 months in
early 2011, there still is no clear sign that the lengthy 2000s labor market recession is over in Ohio.
The determination of a trough from the lengthy 2000s recession in Ohio will require additional positive
growth data for future months. The certainly forthcoming downward revisions to virtually all 2010
months also impact the process of analyzing the current condition of the Ohio business cycle and labor
market.
The data for the first ten months of 2010 do not yet clearly establish that an end to the lengthy 2000s
Ohio labor market recession has arrived. The speed at which the recession has getting worse had
slowed to a halt, and Ohio job growth had resumed in 2010 until the substantial employment losses
estimated on a preliminary basis for August and September 2010. Nevertheless, the largest downward
revision in history to previously released data for prior months in 2008 and 2009 now document that
the ongoing 2000s recession has been substantially deeper than had been previously estimated. The
unusually large role of data revisions in the Current Employment Statistics Ohio trend in newly
released October 2010 data and previously released 2009 data make the new figures unusually difficult
to interpret. The gigantic downward revisions to 2009 data were staggering major changes to
previously released monthly estimates. The US Bureau of Labor Statistics preliminary estimate
released in October finds that forthcoming downward revisions to the USA preliminary job estimates
will be a downward revision of -366,000 jobs when those revisions are released early in 2011. At the
same time, this report estimates from the most recently available data in the complete count of
Ohio jobs that the early 2011 downward revision to 2010 monthly Ohio job estimates will be very
large, and will exceed -85,000 jobs. Given recent trends in Ohio new unemployment claims through
mid-November 2010, there is unfortunately no definite indication that job destruction has ceased from
the 2000s recession in Ohio. In fact the new unemployment claims measured additional job destruction
across virtually all of Ohio during all weeks of 2010 from January through October. But, the
currently estimated job growth of 24,500 jobs during the first ten months of 2010 is marginally
good news, despite the fact that the growth estimate was reduced in August and September
estimates by -32,100 jobs. In addition, it should be remembered that this estimate is certain to be
downwardly revised by a large amount at the beginning of 2011. The forthcoming downward
revision of more than -85,000 jobs to Ohio job estimates is larger than the entire currently
estimated growth in Ohio employment during the first ten months of 2010 at 24,500 jobs. Thus, it
is very likely that Ohio has gained no employment at all during 2010. Definitive data on that issue
will not be released until early in 2011.
Acknowledgment
George Zeller thanks the Cuyahoga County Board of Commissioners for their important financial
support that made this report possible.
% % % *
INCR INCR INCR IF
OHIO REST OF USA OHIO REST OF USA OHIO >
MONTH JOBS USA JOBS JOBS USA JOBS USA
OHIO ONE
TOTAL MONTH
MONTH YEAR EMPLOYMENT CHANGE