Ohio's unemployment rate jumped to 6.4 percent in February, its highest level in more than 11 years, as workers poured into the labor market looking for jobs, the state's Department of Job & Family Services reported Friday.
"This is disappointing news," said Richard DeKaser, chief economist for National City Corp. in Cleveland. He pointed out that payrolls of Ohio employers declined for three straight months.
"It's this renewed weakening that's most concerning," he said. "What's disappointing to me is we really started to pull out of this over the first half of 2004. We were posting some decent job gains. That entirely stalled out."
The February unemployment rate, which topped January's 5.6 percent, matches the rate set in July 2003. Prior to that, the rate hasn't been that high since December 1993.
"The increase in the unemployment rate was due in part to more people looking for work in anticipation of improvements in the economy, rather than significant change in the labor market," said Barbara Riley, director of Ohio Department of Job and Family Services.
The civilian labor force grew by 25,000, but the number of employed fell by 6,000, resulting in the unemployment jump. The number of unemployed in Ohio in February was 379,000, up from 348,000 in January.
Locally, the Cincinnati metro area's unemployment rate stood at 5.8 percent in January, the latest figures available, down from 5.9 percent a year earlier. The number of employed grew by 9,700 from a year earlier, while unemployment fell by 500.
Ohio's situation somewhat mirrored the national picture. U.S. unemployment rose to 5.4 percent in February from 5.2 percent in January, as the civilian labor force grew but employment fell slightly.
But employers nationally added 262,000 jobs in February. Ohio's employers reduced payrolls by 4,100 workers from January to February.
Ohio's manufacturers lost 1,200 jobs in February, bringing to 209,400 the number of manufacturing jobs lost in the state since February 2000. The state also lost jobs last month in construction, manufacturing, information, professional and business services, leisure and hospitality, and trade, transportation and utilities.
"We're now experiencing much more broadly shared job losses. That's a little more difficult to explain," DeKaser said. It might be that higher energy prices are cutting into consumer spending, hurting sectors beyond manufacturing.
Ohio's job stagnation has provided the push in the state legislature for an overhaul of the business tax code and a reduction of personal income tax rates.
The February report "definitely backs up what we've been saying, about Ohio's economy continuing to lag," said Mark Rickel, spokesman for Gov. Bob Taft. "We need to continue to pursue building a better economic climate through the tax reforms that are proposed in the governor's budget. When you see unemployment numbers like that, companies aren't investing, companies aren't creating jobs."
The plan as proposed, however, would be phased in over five years and doesn't provide much relief now, said Rep. Chris Redfern, D-Catawba Island Township, the House minority leader.
"It doesn't make a whole ... lot of sense to me, or many others, that we're giving the wealthiest Ohioans the biggest tax cuts and at the same time cutting back our investments in higher education and health care and neighborhoods," he said.
"Those are all important for business growth, and some are more important than the tax rate."
Kentucky's February unemployment rate has not been released. January unemployment stood at 5.6 percent, down from 6.3 percent a year earlier.
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