Unemployment increase indicates a surge in job-seekers entering the workforce
The takeaway
After a strong May, Ohio employers cut 2,300 jobs in June, according to preliminary data. Unemployment continues to rise, up 0.2 points from May to 4.4% in June. This change in the unemployment rate, however, is driven by a substantial increase in Ohioans entering the workforce, suggesting more Ohioans feel confident in finding a job. Inflation rates continue to fall, down 0.3 points from May to 3.0% in June.
The numbers
Seasonally adjusted data released today by the Ohio Department of Job and Family Services (ODJFS) show that Ohio lost 2,300 jobs last month, from a downwardly revised 5,655,200 in May to 5,652,900 in June. Monthly numbers are preliminary and subject to revision. Though jobs decreased over the last month, Ohio added 11,500 jobs from April to June, suggesting an upward trend overall. Ohio has added 23,100 jobs this year. On average, Ohio has added jobs each month in 2024, indicating steady progress toward a healthy job market.
“Last month’s job loss is minor in comparison to a strong year of growth,” said Molly Bryden, researcher with Policy Matters Ohio. “It would take a few more months of job loss to establish a new trend. Ohioans continue to return to the labor force, indicating an improving economic outlook.”
The details
Service providers shed the most jobs this month, with 14,600 fewer jobs. Losses were consistent across most service-providing sectors, with modest increases in private healthcare and social assistance (+3,300), information (+200), and other services (+100) being the only exceptions. Goods producers gained 2,300 jobs, with the growth in construction jobs (+3,600) outweighing the manufacturing industry’s losses (-1,300). The public sector saw the largest growth this month, adding 10,000 jobs. Growth in local (+5,600) and state (+4,300) government was significant, compared to the addition of 100 jobs in federal government.
“Construction jobs have been trending up since atypical losses in April, showing a promising recovery for the construction industry after a slow hiring season this spring,” said Bryden. “The Federal Reserve’s Chair, Jerome Powell, recently announced that the Fed would begin to cut interest rates without waiting for inflation to reach 2% under the Personal Consumption Expenditures index, the Fed’s preferred measure – another positive sign for the construction industry.”
The household survey
The separate household survey showed that the number of Ohioans unemployed rose by 11,000, as 9,000 Ohioans gained jobs, and 21,000 Ohioans entered the workforce to seek a job. The uptick in unemployment is due to the magnitude of Ohioans entering the workforce, suggesting Ohioans are still confident in the job market, despite the short-term rise in unemployment. The unemployment rate rose 0.2 points to 4.4%. The nation’s unemployment rate was 4.1%.
With more Ohioans available for work, and employment increasing according to the household survey, Ohio’s expanding workforce is largely driving the rise in unemployment. The number of Ohioans in the workforce has increased each month in 2024. It is not unusual for the household survey, which sets the unemployment rate, and the employer survey that reports the monthly jobs numbers to produce conflicting data; revisions and the annual benchmark will typically resolve those conflicts. Overall, steady job gains this year, along with anticipated interest rate cuts, point to a healthy labor market as unemployment rates level.