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Jobless Rate Up; Outlook Positive
Saturday, June 20, 2009 1:59 PM


(Source: The Columbus Dispatch, Ohio)trackingBy Erinn Connor, The Columbus Dispatch, Ohio

Jun. 20--Ohio's unemployment rate took another jump last month, but the worst of the downturn might be over for the state, experts say.

In May, Ohio's jobless rate rose to 10.8 percent, up from 10.2 percent in April, when the number broke into double digits for the first time in a quarter-century.

"When you look back a year or so from now, you'll probably see the trough of the recession is occurring right now," said economist Jim Coons of J.W. Coons Advisors of Columbus. "The unfortunate fact is that unemployment is still high and may rise further before it begins to improve."

The number of unemployed workers increased to 646,000 last month from 609,000 in April. May's jobless rate is the highest since October 1983 and is up 4.5 percentage points from 6.3 percent in May 2008.

But economists agree that even though unemployment numbers are high, there are signs that the economy is headed for an upswing.

Those signs include the three-month stock-market rebound, an increase in take-home pay and a peak in unemployment claims, said Ken Mayland, president of ClearView Economics, based in the Cleveland area. The improvements signal that the financial and psychological effects of the federal stimulus plan are beginning to take effect, he said.

Workers are feeling more confident in the economy, too. Fifty-four percent of Ohio workers think the economy is remaining stable, compared with 32 percent in April, according to a Harris Interactive survey.

Unemployment rates tend to be a lagging indicator, said George Mokrzan, senior economist at Huntington Bancshares. Even when the economy begins to turn the corner, unemployment still tends to be high.

"The fiscal stimulants will start to improve economic growth, probably towards the second half of the year," Mokrzan said. "But we still might get more bad news about unemployment, even as the economy moves forward."

The U.S. unemployment rate jumped from 8.9 percent in April to 9.4 percent in May, the highest national jobless rate since 1983.

The continuing rise in unemployment reflects the ongoing problems in the auto industry, Mayland said. More than 40 Chrysler dealerships in Ohio closed in mid-May, along with announcements from General Motors that plants would be closing this month.

Mayland said he wouldn't be surprised if the jobless rate in Ohio reached 12 percent in the next two months, as the ripple effects of the GM layoffs take hold.

Nationally, other states' jobless rates were worse. Michigan, home to General Motors and Chrysler, had the worst unemployment rate, 14.1 percent.

"It's the same set of circumstances everywhere," Mayland said. "Employers aren't going to start hiring or rehiring with the first green shoot of recovery out there."

Information from the Associated Press was included in this story.

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