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Impact of Sandy on employment figures subsides

December 31, 2012
Morning Journal News

SALEM - New unemployment claims in both Ohio and the nation had been under speculative scrutiny that Hurricane Sandy might distort declines in new unemployment claims, according to Cleveland Economist George Zeller.

Reviewing the most recent data, Zeller, a 1967 Salem High School graduate, said, "That was far from the case at first, but Ohio then suffered a substantial relapse for each of the next four weeks as new unemployment claims increased sharply throughout Ohio through last week's data.

He explained that in the week's new data for the fourth week in December 2012, the impact of the hurricane "finally subsided."

The odd patterns in the data for all weeks of this past November suffered some unusual increases that were storm-related, he said, and the increases in layoffs during November were very large and alarming in both the state and nationally.

"This pattern continued during the first week of December 2012. But, there was slight improvement nationally during all other December weeks," he said.

The numbers show that despite some mixed improvement at the national level this week, the Ohio data are still discouraging Zeller said, explaining that, "Ohio remains at an elevated 'job destruction' level of current new unemployment claims for the 18th consecutive week."

A three-week streak of "job growth" readings in Ohio's unemployment claims ended 18 weeks ago and it's now clear, similar to what happened last year in August 2011, the early August 2012 data were distorted by changes in the scheduling of the model changeover process in the automobile industry, Zeller said.

It's a distortion that has disappeared from the current data and the state layoff figures took a noticeable turn for the worse once again in the Dec. 27 update.

"The Ohio data are clearly worse than mixed but slightly positive data that was released this morning at the national level by the U.S. Bureau of Labor Statistics," Zeller said, adding there is a new factor to be considered.

"Annual Christmas holiday shutdowns in the automobile industry have a startling impact in counties with large automobile assembly plants such as Lucas and Trumbull counties.

The earlier apparent improvement in the Ohio data during early August 2012 is now known to have been impacted by the same seasonal distortion that Ohio saw last year in 2011 from the model changeover period in the automobile industry, Zeller explained.

"This, of course, is a discouraging development."

Zeller's reports are designed to measure the point at which Ohio's lengthy 2000s recessionary contraction in its labor market finally comes to an end as a result of the end of job destruction within the state.

"This week's report finds that despite substantial improvement measured during the last three weeks of January 2011, job destruction returned to Ohio during all weeks of February through July 2011, and that the lengthy 2000-2011 period of job destruction in Ohio did not come to an end, given additional deterioration during the last two weeks of August 2011, and during all weeks of from September through December 2011.

This past week, massive deterioration in Youngstown-Warren returned the Mahoning Valley to a "job destruction" level of current new unemployment claims for the eighth consecutive week.

Further, Youngstown-Warren soared from the lowest elevated level of new unemployment claims among Ohio's seven large urban regions last week, to the highest elevated level among those regions this week.

This startling change is associated with annual patterns at the Lordstown General Motors assembly plant, he said, explaining the seasonal shutdown around Christmas of the plant was the cause of this stunning pattern change.

"Thus, none of Ohio's large urban regions reduced their current level of new unemployment claims into the 'job growth' level this week."

In better news, Ohio experienced a 2011-2012 decrease of -2.0 percent in its level of unemployment claims this year in comparison to last year, a sharp deterioration from last week's figure that was -12.5 percent.

Ohio had 16,469 new unemployment claims during the fourth week of December 2012 last year.

New data in Thursday's update finds that Ohio had 15,990 new unemployment claims during the fourth week of December 2012.

The fact that Ohio's current level of new unemployment claims still exceeds the 1999 "job growth" benchmark is a highly negative figure, despite the new slight 2011-2012 decline.

For more information, visit: www.georgezeller. com /newclaims122212.pdf.



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