Friday, December 11, 2009

Ohio financial report warns Gov. Strickland pace of recovery will be slow

December 10, 11:42 PMColumbus Government ExaminerJohn Michael Spinelli

COLUMBUS, Ohio -- What has become a sobering dose of sour financial news assembled by the director of budget and management and sent to Ohio Gov. Ted Strickland each monthly, did not disappoint Thursday, as numbers contained in the report about declining jobs, the lengthening of time people are unemployed and shortfalls in various tax categories show the first-term governor that the pace of recovery will continue to be slow and underscore how bumpy his run for re-election next year will be.

Ohio, regional states out pace nation on job declines

J. Pari Sabety, Strickland's budget guru, issued a report showing Ohio's percent of job losses (-4.6%) outpaced that of the nation as a whole (-3.6%) but was reflective of job loss percentage for regional, neighboring states, like Michigan (6.4%), Indiana (5.2%), Kentucky (4.4%), Pennsylvania (-3.2%), West Virginia (2.9%). For all states outside the region, the decline was 3.9 percent.

National unemployment is now at 10 percent, but the loss of jobs at 11,000 is the best monthly showing since the economic downturn began in December of 2007.

Sabety's report said that "although we should be encouraged by recent signs and signals from leading indicators, the consensus among forecasters is that the pace of recovery will be slow."

In the broadest measure of unemployment, which includes marginally attached workers -- workers who are neither employed nor actively searching for a job but indicate that they would like to work -- and workers employed part-time because they cannot find a full time job, the report pegged this figure at 17.2 percent.

Further gloomy news on the jobs front said the median duration of unemployment increased to a new all time high of 20.1 week in October. From 1967-2007, that figure averaged just 7.1 weeks, and had never been higher than 12.3 weeks, recorded 1983. Moreover, the average duration of unemployment increased to a new all time high of 28.5 weeks.

Strickland stuck with defending big job loss numbers

The national loss of 41,000 manufacturing jobs lead other sector like trade, transportation and utilities and construction.

Ohio employment edged higher, the report said, with the addition of 1,499 jobs in October but still remains near it slow. For Strickland, a Democratic governor running for reelection next year against a Republican challenger who for the first time out polls him, the loss of of 243,200 jobs, or 4.6%, during the 12 months ending in October will be brought up time and time again as statistical proof Ohio can do better under a different leader.

Among the state's 11 metropolitan statistical areas year over year for October, only Sandusky added jobs (400). The losses for selected cities during the same timer period were Cleveland (-55,500), Cincinnati (-41,200), Columbus (-17,200), Toledo (-15,900), Dayton (-14,500), Akron (-14,300).

Don't count on consumer spending to rally recovery

At $25.1 million, or 2.2%, on the upside of estimates, last month's tax receipts were a plus but still close to expectations. Weakness in revenue from categories like the corporate franchise tax, non auto sales, public utility and kilowatt hour taxes were offset slightly by stronger than expected performance in the personal income and cigarette tax.

With the Christmas seasons bearing down on us, the label used in the report to describe expectations for shopping was "ominous," which supported the description of consumer attitudes as "mixed."

One way to look on the bright side of an otherwise gloomy report is to say that we're not flat on our backs anymore, but we have a long way to go before we can stand upright again.

One sign that consumers are mixed in their feelings is the realization that consumer installment credit outstanding decreased again in September and is down $125.7 billion, or 4.9 percent, from the July 2008 peak, a dive the report said is the largest decline since WWII in both dollar and percentage terms.

State to spend billions more from stimulus funds

As for receiving and spending stimulus dollars from Washington, of the $8.2 billion that Ohio is expected to receive during this three-year program, approximately $2.19 billion has been received, but only about a quarter, or $2.14 billion of it, has been expended.

Follow me on Twitter @ohionewsbureau. Read more stories on people, politics and government in Ohio here.

1 comment:

Peter Dietz said...

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