State of Ohio Workforce. 2 nd Quarter
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1 To Strengthen Ohio s Families through the Delivery of Integrated Solutions to Temporary Challenges State of Ohio Workforce 2 nd Quarter
2 Quarterly Report on the State of Ohio s Workforce Reference Period: Second Quarter 2012 (Per Ohio Revised Code ) Executive Summary Unemployment Rates and Related Data Employment Situation: Ohio and U.S. Ohio Monthly Unemployment Insurance Initial Claims Average Duration of Unemployment: Ohio and U.S. Unemployment Insurance Benefit Exhaustions: Ohio and U.S. Employment Data Ohio Nonagricultural Wage and Salary Employment Trends in Ohio Nonagricultural Wage and Salary Employment Ohio Leading Indicators Mass Layoff Announcements Related Information IHS Global Insight Analysis Other Economic Indicators Technical Notes and Data Sources Ohio Department of Job and Family Services Office of Workforce Development Bureau of Labor Market Information Release date: August 2012
3 Executive Summary Second Quarter 2012 Unemployment Ohio's unemployment rate for the second quarter of 2012 was 7.3 percent, down from 7.6 percent in first quarter of 2012 and down from 8.8 percent one year ago. The U.S. unemployment rate for the second quarter was 8.2 percent, unchanged from the first quarter of 2012 and down from 9.1 percent a year ago. The average number of Ohioans unemployed per month decreased over the quarter from 443,000 to 426,000. Employment: Over the Month Ohio s nonagricultural wage and salary employment increased 21,900 over the quarter, from 5,135,700 in the first quarter to 5,157,600 in the second quarter of Service-providing industries increased by 16,300 jobs over the quarter. Jobs were added in professional and business services; educational and health services; trade, transportation, and utilities; government; other services; and financial activities. Jobs were lost in leisure and hospitality, and information. Goods-producing industries increased by 5,600 jobs over the quarter. Manufacturing expanded, while construction and mining and logging lost jobs. Employment: Over the Past 12 Months Over the year, nonfarm wage and salary employment increased by 74,300 jobs from the second quarter of 2011 to the second quarter of Service-providing industries grew by 49,000 jobs from second quarter Jobs were added in trade, transportation, and utilities; educational and health services; professional and business services; other services; information; and government. Employment decreased over the year in leisure and hospitality and financial activities. Goods-producing industries added 25,300 jobs. Manufacturing, construction, and mining and logging all increased.
4 Employment: Since January 2000 Since January 2000, Ohio s goods-producing industries have lost 34.0 percent of their employment, while service-providing industries have dropped 0.1 percent. In comparison, the U.S. has lost 25.7 percent of the employment in goods-producing industries, while service-providing industries have increased 8.1 percent. Unemployment Insurance Initial claims for unemployment insurance for June 2012 were substantially lower (-18.5%) than the level recorded in June The Ohio average duration of regular unemployment insurance benefits was 18.1 weeks for June 2012, while the U.S. average was 17.3 weeks for the same period. Duration data for other benefit programs (Federal Extended, State Extended) are not available. Ohio s exhaustion rate decreased to 37.6 percent for June The U.S. rate was 47.5 percent in June. The exhaustion rate is the proportion of unemployment insurance recipients who ultimately exhaust their benefits.
5 Unemployment Rates and Related Data
6 Employment Situation: Ohio and U.S. (Seasonally Adjusted) Ohio's unemployment rate for the second quarter of 2012 was 7.3 percent, down from 7.6 percent in first quarter 2012 and down from 8.8 percent a year ago. The U.S. unemployment rate for the second quarter was 8.2 percent, unchanged from first quarter 2012 and down from 9.1 percent a year ago. The average number of unemployed Ohioans has decreased over the quarter from 443,000 to 426,000. Employment Situation Indicators for Ohio and U.S. Quarterly Data Change Percent (in thousands) (in thousands) Change 2nd Q 1st Q 2nd Q From Last From Last From Last From Last Seasonally Adjusted Quarter Year Quarter Year Civilian Labor Force 5,806 5,796 5, % -0.1% Employment 5,380 5,354 5, % 1.5% Unemployment % -16.9% Unemployment Rate 7.3% 7.6% 8.8% -0.3% -1.5% Civilian Labor Force 154, , , , % 0.9% Employment 142, , , , % 1.8% Unemployment 12,656 12,746 13, , % -9.0% Unemployment Rate 8.2% 8.2% 9.1% 0.0% -0.9% Ohio U.S. Ohio s unemployment rate remained higher than the U.S. unemployment rate from 2005 to October Since November 2010 the Ohio rate has been lower than the U.S. rate. During the last six months, Ohio s unemployment rate has been an average of 0.9 percentage points lower than the U.S. rate. Ohio and U.S. Seasonally Adjusted Unemployment Rates Ohio U.S.
7 Initial Claims Ohio Monthly Unemployment Insurance Initial Claims Monthly initial claims for unemployment insurance follow a typical seasonal pattern every year, with major increases in claims activity occurring in January, July and December. Initial claims in June 2012 were lower (-18.5%) than the level recorded in June Ohio Unemployment Insurance Initial Claims* by Month and Year , , ,000 90,000 70,000 50,000 30,000 10,000 * Regular Ohio Law Claims Only Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
8 Average Number of Weeks Average Duration of Unemployment: Ohio and U.S. Average duration represents the average number of weeks of compensation received by unemployed claimants during the represented period. Ohio s average duration of unemployment has remained higher than that of the U.S. for the past 12 months. Ohio average duration declined to 18.1 weeks for June 2012 while the U.S. average fell slightly to 17.3 weeks for the same period. Ohio & U.S Average Duration in Weeks, by Month Ohio U.S. June '11 July Aug. Sept. Oct. Nov. Dec. Jan. '12 Feb. Mar. Apr. May June Ohio U.S Average Duration reflects Regular Ohio Law Claims only.
9 Percent Unemployment Insurance Benefit Exhaustions: Ohio and U.S. The exhaustion rate represents a measure of the proportion of unemployment insurance recipients who ultimately exhaust their benefits. Ohio & U.S Exhaustion Rate, by Month Ohio U.S. June '11 July Aug. Sept. Oct. Nov. Dec. Jan. '12 Feb, Mar. Apr. May June Ohio U.S Exhaustion Rate reflects Regular Ohio Law Claims only. Ohio and national exhaustion rates have slowly declined over the past 12 months. Ohio s exhaustion rate stayed consistently lower than that of the U.S. Ohio s exhaustion rate decreased to 37.6 percent, while the U.S. rate held relatively steady at 47.5 percent in June 2012.
10 Employment Data
11 Ohio Nonagricultural Wage and Salary Employment (Seasonally Adjusted) Ohio s nonagricultural wage and salary employment increased 21,900 over the quarter, from 5,135,700 in the first quarter of 2012 to 5,157,600 in the second quarter of Service-providing industries, at 4,312,900, increased 16,300 over the quarter. Jobs were added in professional and business services (+6,300), educational and health services (+5,200), and trade, transportation, and utilities (+3,800). Employment was also up in government (+1,800), other services (+1,200), and financial activities (+200). Jobs were lost from first quarter 2012 in leisure and hospitality (-1,700) and information (-500). The total workforce in goods-producing industries increased 5,600 to 844,700. Manufacturing (+6,000) expanded, but construction (-300) and mining and logging (-100) posted job cuts over the quarter. Over the year, nonfarm wage and salary employment advanced 74,300. Service-providing industries grew 49,000 from the second quarter of Jobs were added in trade, transportation, and utilities (+20,500), educational and health services (+19,100), and professional and business services (+10,300). Smaller improvements were seen in other services (+3,700), information (+1,300), and government (+400). Employment decreased over the year in leisure and hospitality (-5,400) and financial activities (-900). Goods-producing industries added 25,300 jobs. Manufacturing continued its upward trend (+20,100) as year-to-year improvements were seen in both durable (+16,100) and nondurable (+4,000) goods. Construction (+4,900) and mining and logging (+300) also posted gains.
12 Nonagricultural Wage and Salary Employment Estimates for Ohio a 2nd Q 1st Q 2nd Q From Last From Last From Last From Last Seasonally Adjusted Quarter Year Quarter Year Employer Survey Data b Employment Change Percent (in thousands) (in thousands) Change Total 5, , , % 1.5% Goods-Producing Industries % 3.1% Mining and Logging % 2.6% Construction % 2.8% Manufacturing % 3.2% Durable Goods % 3.8% Nondurable Goods % 1.9% Service-Providing Industries 4, , , % 1.1% Trade, Transportation, and Utilities % 2.1% Wholesale Trade % 3.0% Retail Trade % 2.2% Transportation, Warehousing, and Utilities % 1.0% Information % 1.7% Financial Activities % -0.3% Finance and Insurance % 1.4% Real Estate and Rental and Leasing % -7.1% Professional and Business Services % 1.6% Professional and Technical Services % 2.2% Management of Companies and Enterprises % -1.1% Administrative, Support, and Waste Services % 2.2% Educational and Health Services % 2.2% Educational Services % -0.3% Health Care and Social Assistance % 2.6% Leisure and Hospitality % -1.1% Arts, Entertainment, and Recreation % -0.6% Accommodation and Food Services % -1.2% Other Services % 1.8% Government % 0.1% Federal Government % -2.5% State Government % 3.5% Local Government % -0.6% a Subtotals may not add to totals due to rounding. All data exclude military personnel. b From the Current Employment Statistics Survey, a monthly survey of approximately 18,200 employers conducted by ODJFS in cooperation with the U.S. Bureau of Labor Statistics. Estimates represent nonagricultural wage and salary jobs by place of work. Current Employment Statistics Bureau of Labor Market Information Office of Workforce Development Ohio Department of Job and Family Services
13 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Percent Change Trends in Ohio Nonagricultural Wage and Salary Employment Percent Change in Ohio Nonfarm Employment by Month, since January Total Nonfarm Goods-Producing Service-Providing Recessionary periods as defined by the National Bureau of Economic Research (NBER) Since January 2000, Ohio s goods-producing industries (manufacturing, construction, and mining and logging) have lost 34.0 percent of their employment while service-providing industries have dropped 0.1 percent. In comparison, the U.S. has lost 25.7 percent of the employment in goodsproducing industries while service-providing industries have increased 8.1 percent.
14 Leading Indicators: Ohio and U.S. (Seasonally Adjusted) Ohio s composite index of leading indicators increased from 91.2 to 91.7 for the second quarter of The composite index was 1.3 percent higher than the 2011 second quarter index. The national composite index of leading economic indicators increased from 95.2 to 95.7, and this was 1.7 percent higher than the 2011 second quarter index. Please note the entire U.S. leading indicators data series was revised in December 2011; the current U.S. data series cannot be compared to U.S. leading indicators reported prior to December Ohio Leading Indicator Index and Seasonally Adjusted Employment
15 The second quarter 2012 averages of individual Ohio index components (not seasonally adjusted) were improved compared to one year ago. Initial claims for unemployment insurance were lower, average weekly hours manufacturing increased, and the number of housing permits and their valuation were significantly higher than for the second quarter of U.S. and Ohio Leading Economic Indicators & Components Economic Indicators Leading Indicator Index (2000=100) Average Initial Claims for Unemployment Compensation Average Weekly Production Hours in Manufacturing Average Valuation of Housing Permits (Millions) Average Number of Housing Permits National Composite of Leading Economic Indicators (1996=100) U.S. Domestic Auto Production (Millions) Average Number of Housing Permits Data Q Q Q Ohio Net Change Last Last Year Quarter Percent Change Last Last Year Quarter % 1.3% 46,649 59,089 58,397-12,440-11, % -20.1% % 2.0% $ $ $ $ $ % 17.9% 1,490 1,056 1, % 21.4% National % 1.7% % 53.2% 70,568 55,195 56,193 15,373 14, % 25.6%
16 Mass Layoff Announcements Announcements of potential mass layoffs are reported by business entities. Lengths of potential layoffs vary; most announcements are for temporary layoffs. These statistics have proven useful to explain major shifts in the employment situation that may occur at the local level from one month to another. Mass layoff announcements typically have seasonal peaks in July and December. During the second quarter of 2012 there were 142 mass layoff announcements with the potential to affect up to 23,003 workers. During the second quarter of 2011 there were 184 announcements potentially affecting up to 25,872 workers.
17 Related Information
18 IHS Global Insight National Analysis: IHS Global Insight believes the recovery has slowed, but has not stopped. Global slowdowns have affected domestic manufacturing. This and a stronger dollar are expected to slow export growth. Job growth in the healthcare and private educational services sectors was especially disappointing in June. There have been three consecutive months of sub-100,000 job creation at the national level, but IHS Global Insight believes that seasonal-adjustment issues and a warm-winter payback are exaggerating the slowdown. IHS Global Insight now expects national jobs growth around 135,000 per month. A deeper Eurozone recession and a sharper slowing in China are two of the biggest risks to the economy. Other Economic Indicators: The Conference Board s national Help-Wanted OnLine (HWOL) data series, a measure of labor demand, increased nationally by 232,000 online ads in June. Ohio increased by 7,900 online ads from May to June. Ohio s supply/demand rate, the ratio of the number of unemployed to advertised job vacancies, dropped slightly to 2.26 in June, while the national supply/demand rate increased to A lower supply/demand rate is better. The Conference Board s national Employment Trends Index declined from a revised in May to in June. The June 2012 index is up 5.6 percent from June The decline was driven by negative changes in four components of the index: the percentage of firms unable to fill positions now, the ratio of involuntary part-time to all part-time workers, initial claims for unemployment insurance, and the percentage of survey respondents who said jobs are hard to get. The Employment Trends Index has been flat since February, suggesting that slow employment growth is likely to continue through the summer, said Gad Levanon, Director of Macroeconomic Research at the Conference Board.
19 Technical Notes and Data Sources
20 Unemployment Rates and Related Data Employment Situation: Ohio and U.S U.S. data are from a national household survey known as the Current Population Survey (CPS). This survey is conducted monthly by the U.S. Census Bureau for the U.S. Bureau of Labor Statistics (BLS). The survey collects data on the demographic characteristics and labor force status of household members, including employment and unemployment from approximately 60,000 households. Ohio data are developed in cooperation with the BLS using the State Time Series Analysis and Review System (STARS). This method relies on monthly unpublished CPS, wage and salary employment, and unemployment insurance data. The time series model is designed to provide data on employment, based on place of residence. Seasonal Adjustment Ohio and U.S. unemployment rates and labor force data are published monthly by the BLS. Two sets of data are published: seasonally adjusted data and not seasonally adjusted data. County data are not seasonally adjusted because seasonal adjustment factors tend to be unreliable for small areas. Seasonal adjustment is used to remove fluctuations in unemployment and labor force trends that normally occur with changes in the season. The removal of seasonal variation allows evaluation of the unemployment rates as an indicator of economic change.
21 Seasonal variation in employment occurs for natural and institutional reasons, including less employment involving outdoor activities during winter, changes in labor force and unemployment levels with opening and closing of schools, and layoffs during the automobile model changeover period. The impact of such events is a rise in unemployment rates, usually peaking in early winter and midsummer, and lower unemployment during the spring and late summer. The graph on the preceding page presents the wide month-to-month changes that occur in the not seasonally adjusted data, which reinforces our use of seasonally adjusted data, when available. Ohio Monthly Unemployment Insurance Initial Claims Initial claims information is obtained from administrative records of the Ohio unemployment compensation program, operated by the Ohio Department of Job and Family Services. An initial claim is defined as any notice of unemployment filed to request a determination of entitlement to and eligibility for compensation, or to begin a second or subsequent period of eligibility within a benefit year. Initial claims counts presented in this report include new, additional, transitional, and interstate agent claims. Beginning in January 2005, transitional claims are excluded from counts since they do not represent newly unemployed workers. Average Duration of Unemployment and Unemployment Insurance Benefit Exhaustions: Ohio and U.S. Average duration of unemployment is calculated as the total number of weeks compensated for the previous 12 months divided by the total number of first payments for the same 12 month period. First payment is defined as the first payment in a benefit year for a week of unemployment. Exhaustion rates are calculated as the number of claimants exhausting benefits divided by the number of claimants first receiving benefits two quarters earlier. Quarterly totals for average duration of unemployment and number of exhaustions in the U.S. and Ohio were obtained from the U.S. Department of Labor, Employment and Training Administration (ETA). The national ETA office collects unemployment data from the states, then compiles and redistributes state and national unemployment insurance statistics through a required reporting mechanism in which all states participate. The Claims and Payment Activities report (ETA-5159) serves as the basis for these figures. The Employment and Training Administration site is:
22 Industry Employment Data Ohio Nonagricultural Wage and Salary Employment Ohio nonfarm employment data are derived from an employer survey known as the Current Employment Statistics survey (CES). This survey is conducted monthly by BLS. The data are compiled from voluntary responses from a sample of 18,200 Ohio employers. The employer survey provides data on total employment, and on hours and earnings of production workers, by type of industry. The employer survey does not include the self-employed, unpaid family workers, private household workers, agricultural workers, or those on strike or unpaid vacation. Data are for place of work. Analysts generally regard the nonfarm data as the most reliable indicator of the current economic conditions due to its large sample size and the fact that the data are benchmarked annually to the complete count of employment from administrative unemployment insurance records. Trends in Ohio Nonagricultural Wage and Salary Employment Goods-producing industries include natural resources and mining, construction, and manufacturing. Service-providing industries include trade, transportation and utilities, information, financial activities, professional and business services, educational and health services, leisure and hospitality, other services, and government. Household vs. Industry Employment The statistics in the Employment Situation section of this document are dependent on the Current Population Survey (CPS, often referred to as the Household survey). These figures are useful for understanding unemployment rates, however, as a general measure of job growth or decline, they have proven problematic. The CPS for Ohio contains a small sample of households, tends to be highly volatile and is benchmarked (i.e., controlled to a known universe) only once every ten years with the decennial census. It has not proven to be a good measure of business cycle fluctuations. The most reliable and most easily understood statistic on jobs is the nonagricultural wage and salary employment, which comes from the Current Employment Statistics (CES) survey. This business establishment survey tracks most closely with business cycle changes and is the statistical source most heavily relied on by labor economists, including those at the Bureau of Labor Statistics. It provides information on jobs lost or gained month to month and over the year. Of course, there is considerable dynamic activity behind these figures in respect to job changes, layoffs and hiring activity, which in themselves are not represented in the net job statistic.
23 These datasets provide two different views of Ohio employment. Mass Layoff Announcements Mass layoff announcements are reported by the business entity. These statistics have proven useful to explain major shifts in the employment situation that may occur at the local level from one month to another. However, they must be used with caution, particularly when considering them at a summary level or as a state-wide indicator. These statistics have the following caveats: ODJFS requests employers to provide the greatest number of workers potentially affected and actual numbers are normally less. Any employer may announce mass layoffs multiple times and/or for multiple locations over the year. There is no formal process or monitoring to ensure consistent reporting. These numbers are reported intent and are never independently verified. Circumstances may change that decreases the size of a layoff or eliminate the need for a layoff. Even if a layoff materializes, it does not necessarily mean people are unemployed as a result. They may retire, work part time, take severance pay or find another job. A number of the reported layoffs are part of a normal business cycle, where the business normally restricts operations for product change-over, inventory processes or because of seasonal demand cycles. Some layoffs are very short lived, while others could take a year or more to complete. There is no precise measure of timing.
24 Web links for additional information U.S. Bureau of Labor Statistics site: Ohio Bureau of Labor Market Information site:
25 Office of Workforce Development P.O. Box 1618 Columbus, OH Bureau of Labor Market Information Business Principles for Workforce Development Partner with the workforce and economic development community. Develop and deploy new information solution tools and systems for the workforce and economic development community. Provide products and services that are customer and demand driven. Be known as an important and reliable source for information solutions that support workforce development goals and outcomes. This quarterly report was prepared by the Ohio Department of Job and Family Services to meet the requirements of the Ohio Revised Code For further information, visit or call the Ohio Bureau of Labor Market Information at John R. Kasich, Governor State of Ohio Michael B. Colbert, Director Ohio Department of Job and Family Services Office of Workforce Development Bureau of Labor Market Information (8/2012) An Equal Opportunity Employer and Service Provider
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