Ohio employers added another 6,800 jobs in December, maintaining the strong job growth we’ve seen through 2024. Although Ohio’s job gains this year signal a robust statewide economy, unemployment has continued to rise, as Ohio employers have struggled to keep pace with the number of jobseekers entering the labor force. Ohio unemployment rose to 4.4% in December, up 0.1 percentage points from November, while the national unemployment rate dropped 0.1 percentage points to 4.1%. Inflation continues to creep upward, with a rate of 2.9%, 0.2 percentage points higher than November’s rate.
The takeaway: Ohio’s job market showed strong growth last year, adding 61,400 jobs since December of 2023, with an average monthly increase of 5,117 jobs. These preliminary totals will be revised and confirmed through the annual benchmarking process that concludes in March. After trending downward since March of last year, inflation fell to a three-year low in September, promptly followed by an uptick in October, a trend that continued through December.
“Inflation ticked up for the third consecutive month, a concerning trend further exacerbated by anticipated tariffs on imported goods under a second Trump administration – which are ultimately paid by U.S. consumers in the form of higher prices,” said Molly Bryden, researcher with Policy Matters Ohio. “While economists raise alarms implicating the tariffs’ strain on U.S. household budgets, the flurry of executive orders signed during the first week of Trump’s presidency indicate his intention to execute his campaign promises regardless of their impact on working families. Moreover, experts suggest other nations may respond with retaliatory tariffs on U.S. imports, with severe implications for the oil and gas industry in particular. While the president’s plan for ‘energy dominance’ may stimulate jobs in domestic oil and gas production in the short term, retaliatory tariffs would pose significant challenges to realizing this goal. At the same time, the administration’s aggressive approach to immigration policy will further weaken the U.S. workforce, especially in the agricultural industry, which largely relies on migrant workers. Sweeping changes to U.S. economic and immigration policy offer little hope for cooling inflation in the near future.”
The numbers: Service providers drove Ohio’s job growth this month, adding 7,000 jobs in December. Within the service industry, the leisure and hospitality sector saw the largest growth (+4,300), although jobs in the accommodation and food services sector have yet to recover from the COVID-19 pandemic, as Ohio employers reported 12,800 fewer jobs compared to February 2020 levels. Trade, transportation, and utilities sector jobs increased by 1,700, due to gains in retail trade (+3,500), which moderated losses in wholesale trade (-500) and in transportation, warehousing, and utilities (-1,300).
Overall, goods producers shed 700 jobs in December, due to moderate losses in construction (-400) and manufacturing jobs: Durable goods manufacturing jobs dropped by 500, with no change in nondurable goods manufacturing jobs. Manufacturing jobs are down 4,300 from this time last year.
“Contraction in the manufacturing industry began to slow in December, though rising supply-chain costs may continue to erode the industry, as the inflationary impacts of Trump’s executive actions further weaken consumer demand,” said Bryden.
Last month’s gains in public sector employment were lower than indicated by preliminary data, with November’s revision showing an increase of 500 public sector jobs between October and November, followed by another 500 jobs added in December. State and local government jobs increased slightly (+600 and +100, respectively), while jobs in the federal government decreased by 200.
“As always, we continue to monitor public sector employment, especially with broad uncertainties ahead,” said Bryden. “We can expect greater losses in federal government jobs with federal spending cuts, and as the plan for the Department of Government Efficiency – championed by President Trump and Elon Musk – takes shape. Future cuts to federal spending may additionally harm Ohioans holding employment in state or local government, with more implications for Ohio’s working families as public service capacity dwindles.”
The household survey: The separate household survey showed the number of unemployed Ohioans rose by 3,000, with 1,000 jobseekers entering the labor market, as the number of employed Ohioans dropped by 2,000. After several months of falling unemployment levels, Ohio’s unemployment rate increased by 0.1 percentage points from November to a 4.4% unemployment rate in December. Nationally, unemployment rates showed the reverse of Ohio’s trends, dropping 0.1 percentage point to 4.1% in December, following two months of rising unemployment in October and November.
Corresponding with substantial month-to-month growth in the labor force, Ohio’s labor force participation rate has gradually trended upward this year, ending the year at 62.6%, compared to 61.8% in January of 2024. An average of 8,800 Ohioans entered the labor force each month this year, signaling continued confidence in the job market. However, the average monthly increase in employment (+4,800) struggled to keep pace, leaving the unemployment rate 0.7 percentage points higher than in the beginning of the year, suggesting a possible weakening of the tight labor market that supported much needed wage growth after the pandemic.
“Ohioans will have to navigate an uncertain economy in the coming months (or years),” said Bryden. “Policymakers must focus on bolstering economic security for Ohio’s working families, at both the state and federal levels.”