Last week, the Ohio Department of Job and Family Services (ODJFS), in partnership with the Department of Labor, released job and unemployment indicators for January, along with annual benchmark revisions to 2025 data. Benchmarks show weaker month-to-month job growth in 2025, compared to preliminary jobs reports.
The takeaway: 2025 marks the first year in which Ohio saw a year-to-year decline in jobs since the COVID-19 pandemic. Between December 2024 and 2025, Ohio employment fell by 5,600, compared to a 35,000 increase in jobs over the previous year. Overall, however, job growth has largely stagnated since May of 2023, when Ohio regained its pre-COVID job levels. Ohio employers added 16,300 jobs in January, following a substantial downward revision to December’s estimates (-45,500).
In January, Ohio’s unemployment rate ticked down 0.1 percentage points from 4.4% in December 2025 to 4.3% in January 2026, largely due to a contraction in the labor force (-6,000) over the same period.
The benchmark: Data released last week by the federal Bureau of Labor Statistics (BLS) and ODJFS show that Ohio saw sluggish job growth in 2025, compared to initial estimates for monthly job growth. The data come from an annual benchmark revision to the Current Employment Statistics, a survey of businesses released each month to track the job market. Benchmark data show Ohio employers shed 5,600 jobs between December 2024 and December 2025, reporting 45,500 fewer jobs than originally indicated by initial estimates.
“Initial jobs reports painted an overly optimistic picture for Ohio’s economy in 2025,” said Molly Bryden, researcher with Policy Matters Ohio. “Although January’s gains outweigh the net losses seen in 2025, deep revisions to initial monthly estimates in 2025 underscore the importance of using caution and examining long-term economic trends that emerge over time, rather than assigning undue weight to preliminary monthly numbers. Benchmark data reveal stalled economic growth in Ohio over the past couple years, further reinforcing the economic uncertainty Ohio’s working families are navigating.”
Ohio’s job losses in 2025 were concentrated among service providers (-12,000) and the federal government (-7,500), while goods-producers added 7,500 jobs. The private education and health services sector was the only service sector that saw growth in 2025, driven by health care and social assistance providers (+12,200), with no change in private educational service employment.
“The drop in federal government employment is unsurprising, considering the ongoing volatility at the federal level following the administration change,” said Bryden. “Inflationary pressures and increasing economic uncertainty could be to blame for the hiring slowdown in the private sector, indicated by losses distributed across most service-providing sectors.”
The January numbers: Seasonally adjusted data released last week by ODJFS show that Ohio employers added 16,300 jobs in January, from a downwardly revised 5,663,400 in December to 5,679,700 in January.
Service providers drove January’s job growth (+17,000), with consistent gains in most service sectors. Goods-producers saw job losses across most industries, with 500 fewer construction jobs and 150 fewer manufacturing jobs (-800 and -700 in durable goods and non-durable goods manufacturing jobs, respectively), while mining and logging jobs increased by 100 in January. Within the public sector, gains in state and local government employment (+1,600 and +200, respectively) offset the continued decline in federal government employment (-600).
“Job gains in January reflect national trends, which exceeded expectations,” said Bryden. “January’s growth outweighed annual losses in 2025, which may signal Ohio’s economic resilience, though today’s benchmark shows how preliminary estimates often require dramatic revisions. Monthly job growth should be monitored with caution, especially when other economic indicators underpin concerns about Ohio’s weakening economy.
“Stubborn inflation has already been straining Ohio household budgets, largely driven by state and federal policy decisions, along with regional dynamics – like the imbalance between in-state electricity supply and demand, which is driving up energy costs for Ohio households. Now, increasing geopolitical tensions amid the war in Iran risk greater spikes in energy and grocery costs, exacerbating financial pressure on working Ohioans and their employers. Ohioans shouldn’t have to foot the bill for state and federal policy decisions that leave working Ohioans behind.”
The household survey: The separate household survey shows that 6,000 Ohioans exited the labor force in January, while employment fell by 1,000 and the number of unemployed Ohioans decreased by 3,000. (Those numbers don’t sum due to rounding.) Ohio’s unemployment rate decreased to 4.3% (-0.1 percentage points), closing the gap between the statewide and national unemployment rates.
Between January 2025 and January 2026, 39,000 Ohioans left the labor force – meaning they either left a current job or gave up on searching for one – despite a 43,000 increase in Ohio’s working age population over the same period. At the same time, Ohio’s labor force participation rate decreased by 0.7 percentage points, from 62.9% in January of 2025 to 62.2% in January of 2026 – still slightly above the national rate of 62.1%.
“There are likely a range of forces driving Ohioans out of the labor force – whether it’s a broader decline in confidence in Ohio’s economy, working Ohioans losing hope after long periods of unemployment, or increased immigration enforcement activity discouraging immigrant workers and Ohioans of color from participating in local economies,” said Bryden. “Any of these factors, and likely more, could be at play. Regardless of the root cause, reversing the economic slowdown Ohio is starting to see will prove challenging without a robust labor force – and the public investment needed to connect working Ohioans to jobs with good wages and benefits.”