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Published: Saturday, 7/23/2011 - Updated: 3 years ago

Ohio, Mich.’s jobless rates rising slightly

Economists see worrisome trend, not immediate alarm

BY JON CHAVEZ
BLADE BUSINESS WRITER

After trending downward for more than a year, unemployment rates have inched up in Ohio and Michigan and 26 other states, generating concerns about whether the economy is faltering in its recovery.

In Ohio, the rate for June was 8.8 percent, up two-tenths of a percentage point from May’s 8.6 percent, the state Department of Job and Family Services said Friday.

It marked the first time in 14 months that the state rate has risen since it peaked at 11 percent in March, 2010.

In Michigan, the rate was 10.5 percent in June, up from 10.3 percent in May, that state said this week. The Michigan rate rose by one-tenth of a percentage point in May from April, but otherwise the rate had declined each month for more than a year.

Economist Jim Coons of J.W. Coons Advisors LLC in Columbus said slight rises in the jobless rate for Ohio and Michigan aren’t cause for immediate alarm. “You don’t need to press the panic button yet,” he said.

“Two-tenths of a percentage move in a state is not really statistically significant. You can’t tell if it really changed,” he said. The rate could get revised later in the year.

But improvement in unemployment rates nationally and in various U.S. regions has stalled lately.

The U.S. Labor Department said Friday that jobless rates climbed in 28 states last month, dropped in eight, and were flat in 14. Twenty-six states reported a net gain in jobs in June, while 24 states lost jobs.

The changing trend in state unemployment rates reflects a weaker economy hampered by high gas prices and lower factory output. Nationally, employers added only 18,000 net jobs in June, the second straight month of feeble hiring. The U.S. unemployment rate ticked up to 9.2 percent. Nevada had the highest rate among the states in June, at 12.4 percent.

Still, Mr. Coons said: “At this point, I think we’re still pretty far away from another recession. But I think we need to see a few more months of data to see where this is going.”

Economist Ken Mayland of ClearView Economics in suburban Cleveland said the underlying factors of the rising jobless rate have him concerned.

The national rate has risen because increasing gasoline prices have changed consumer habits, including reduced spending for other retail items, and that in turn has curtailed hiring, he said.

The economic problems likely will persist in July and August in Ohio and nationally, he said, and keep unemployment rates rising.

“Hopefully we will resolve some of these uncertainties in a while and get back on track,” he added.

In a slight bit of good news for Ohio, new claims for unemployment benefits totaled 12,307 for the week ending July 16, down 14 percent from the same week a year earlier and much lower than the week before.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.



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