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Applications for unemployment benefits fall in Ohio and U.S.
By Olivera Perkins
8/11/11 

Finally, some promising signs about the job market amid the recent financial turmoil. 

The number of new unemployment claims filed last week fell to numbers that suggest both the nation and the state economies may be mending slowly after a recent slump, U.S. Labor Department figures released Thursday show. 

Nationally, applications for unemployment aid dropped by 7,000 to a seasonally adjusted 395,000, the Labor Department said Thursday. Applications had been above 400,000 for the previous 17 weeks. 

“To see a sustain period of recovery and job growth, we need to be at 400,0000 for several weeks,” said George Zeller of Cleveland, an economic research analyst who closely follows Ohio’s labor market. 

The four-week average, a less-volatile figure, fell to 405,000 nationally, its sixth straight decline and the lowest level since mid-April. 

In Ohio, new claims for unemployment compensation fell to 9,885. Anything below 10.024 is good, Zeller said. The benchmark dates to 1999, the last time Ohio saw job growth. 

Labor Department figures suggest that the job market here and nationally is easing itself around during a slow recovery. 

These numbers also show that manufacturing, hit hard by the recession, is helping to fuel the recovery. 

In Ohio, the first week of August often shows an uptick in new jobless claims because that is traditionally when auto manufacturers lay off workers to retool the plants for the next model year, Zeller said. Retooling occurred about a month earlier this year because of the earthquake in Japan. 

Claims are based on where new applicants live. The trend of lower unemployment claims in Ohio was not evenly spread. 

Counties near a concentration of auto manufacturing plants -- Toledo, Youngstown and Warren -- showed the lowest new claims, Zeller said. 

In Northeast Ohio, Cuyahoga, Lake, Lorain, Medina and Geauga tended to be above the state average for new claims. 

Finance, banking and related sectors have been hard hit by layoffs in recent weeks, and new unemployment claims reflected that . The beginning of layoffs of local and state workers because of budget cuts and the end of federal stimulus programs also is beginning to be reflect in new claims in these counties, Zeller said. 

Cuyahoga didn’t have enough auto employment to escape the trend, Zeller said. The county recorded 1,143 new claims and should be below 1,000, he said. 

The Columbus area, with little auto and a lot of government and finance, is not well-positioned. 

Metro Columbus, by far, has the state’s highest levels of new unemployment claims, with Cincinnati second, Zeller said. 

Nationally, new claims applications fell in February to 375,000. They soared to an eight-month high of 478,000 in late April and have declined slowly since then. 

Levels below 400,000 are associated with growth, but if the figure exceeds 350,000, the growth is considered weak, Zeller said. 

There were fewer layoffs last week in the manufacturing, transportation and service industries, according to the report. Only nine states reported an increase in applications. 

Paul Dales, senior U.S. economist at Capital Economics, said the decline shows the job market is at least not getting worse. 

“Of course, it tells us nothing about hiring, which the market turmoil of recent weeks will not have helped,” Dales said. 

The national economy added 117,000 net jobs in July, the government said last week. That was an improvement from the previous two months. But it’s far below the average of 215,000 jobs per month that companies created from February through April. 

The Ohio figures for July are scheduled to be released Aug. 19. 

Many employers pulled back on hiring after signs emerged that the economy had weakened from last year. High gas prices and scant wage gains left consumers with less money to spend on discretionary purchases, such as appliances, furniture and electronics. Supply chain disruptions caused by the Japan crisis also dampened U.S. factory production. 

The economy expanded at an annual rate of just 0.8 percent in the first six months of the year, the slowest growth in the two years since the recession officially ended. 

Steven Wood, chief economist at Insight Economics, said the declining trend in weekly unemployment benefit applications is an encouraging sign for the job market. 

“Although the labor market also hit a ‘soft patch’ along with most of the rest of the economy during the spring and early summer, it now appears to be strengthening, at least a little, again,” he said. 

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