Companies throughout Ohio are begging for workers as the economy fully reopens and the pandemic recedes.
Yet, state employment data released Monday for May paints a far different picture, one of an economy struggling to get back to where it was before the coronavirus struck.
The Ohio Department of Job and Family Services said Ohio’s unemployment rate climbed to 5% from 4.7% in April. Employers cut 14,800 jobs and the number of unemployed rose by 5,000 workers to 278,000.
The labor force, made up of the people with a job or looking for work, shrank by 218,300 workers in May to 5.55 million workers. That number topped 6 million in 2007 before the financial crisis struck.
Ohio needs about 300,000 more jobs to get back to where it was before the pandemic.
The state and economists say there are several factors behind the loss of jobs in the month: Supply chain issues such as the shortage of semiconductor chips needed in everything from cars to appliances, worker retirements and workers quitting their jobs.
In the first month of the pandemic, when the economy was largely shut down, the labor force lost nearly 300,000 workers. Before the tumble in May, it had recovered about half of those losses.
This latest drop put the labor force back to its lowest levels since the late 1990s.
Economists believe the number could be revised in the months ahead.
“All these estimates come with a margin of error,” said economist Bill LaFayette, owner of economic consulting firm Regionomics.
The monthly jobs report is made up of two surveys: one of households and one of employers. The household survey asks whether members of the household are working or looking for work.
The state said an unusually large number of survey respondents who were counted as employed in April left the labor force in May.
The state also said there could be sampling errors, and it noted the trend in older workers opting to retire rather than remain in the workforce. Other people could have opted to enter training programs rather than taking jobs, the state said.
LaFayette said he would expect the labor force to bounce back in coming months.
PNC Bank economist Bill Adams said some of the loss in the labor force and the jobs in May can be explained through the supply chain issues, higher prices for lumber and other commodities, and the loss of jobs in some sectors that saw growth during the pandemic such as messengers.
Like LaFayette, Adams said he expects the labor force to bounce back in coming months.
“It’s a disappointing release,” he said of the monthly jobs report. “It kind of parallels the national labor market data.”
The unemployment report nationally in April and May came in below analyst expectations for job creation.
“The takeaway is that the economy can’t turn on a dime,” he said. “The moment we get COVID cases down, it’s going to be a slow process of bringing Ohioans back into the job market.’’
Job losses were widespread during the month.
The trade, transportation and utilities sector lost 7,800 jobs last month, the most of any sector. The finance sector lost 3,400 jobs, manufacturers shed 2,600 jobs and construction cut 1,200 jobs.
The leisure and hospitality sector, the hardest hit by the pandemic, added 2,300 jobs, the most of any sector last month.
@BizMarkWilliams
