Ohio Unemployment Rate Remains Significantly Lower Than U.S.

This report is a summary of third-party economic research and perspectives to foster communication with business and economic development stakeholders during the COVID-19 crisis.

Key Economic Insights

• Global: The OECD said GDP in the G20 area returned to pre-pandemic levels in Q1 2021.
• U.S.: Federal Reserve announced it expects to raise rates by the end of 2023.
• Ohio: Case Western Reserve ranks 21st in the world for U.S. utility patents.

Global Insights

Confirmed cases of COVID-19 passed 178M million globally, according to Johns Hopkins University. The number of confirmed deaths stands at nearly 3.9M.  More than 2.6B vaccination doses have been administered globally.  The Biden Administration’s global minimum corporate tax plan would leverage the U.S. consumer market to entice countries to impose a minimum tax rate amid U.S. threats to tax those companies directly.

China’s May retail sales lagged expectations despite rising by 12.4%, which fell short of the projected increase of 13.6%.  The pace of recovery is expected to remain slow as Chinese consumers’ propensity to save remains high.  Businesses and consumers fear another shipping crisis as an uptick in COVID-19 cases in southern China disrupts port services and delays deliveries. The quickly accelerating U.S. economy is pushing some central banks to raise interest rates to keep pace with the rising U.S. dollar.  A global consensus concerning rising interest rates risks impeding economic growth among some countries.

U.S. Insights

The Federal Reserve announced last week that it expects to raise interest rates by the end of 2023.  A strong economic rebound following the pandemic, and increased inflation prompted the policy shift.  The Fed reiterated its commitment to bond purchasing until substantial further progress has been made in the economic recovery. This comes as the Fed has been evaluating options to address rising price levels and recent inflationary pressures.

After five months of expansion, Chief Executive’s latest poll of CEO confidence declined for the second month in a row in June, to 6.9 out of 10, the lowest point since vaccinations began.  Retail sales decreased 1.3% in May as consumers shifted from goods spending to services spending related to going out amid state re-openings and increasing vaccination rates.  U.S. producer prices rose 0.8% in May over April.  Jobless claims increased by 37,000 to 412,000 last week marking the first increase since April, reversing the decreasing trend in filings.

Mortgage demand rebounded due to a drop in interest rates.  Application volume rose 4.2% and refinances rose 6% for the week.  A new report highlighted the U.S. housing market needs 5.5M more units.  Lumber prices are expected to decrease in the coming months as futures for July lumber deliveries are down 42% to $996.20 per thousand board feet from their record high of $1,711.20.  U.S. household net worth reached $136.9T due in part to government stimulus and stock market gains marking a 3.8% gain from the end of 2020.

General Motors subsidiary Cruise obtained a $5B credit line to increase efforts to commercialize its autonomous self-driving Origin shuttles.  U.S. solar installations rose 46% in the first quarter, on track for record-breaking growth over the next three years.  Hitachi announced plans to build a large semiconductor plant in Oregon. TSMC is considering its first chip manufacturing plant in the U.S.

Ohio Employment & Economic Insights

Ohio’s unemployment rate in May was 5%.  Case Western Reserve ranks 21^st in the world for U.S. utility patents. Point Broadband announced a joint effort to expand its state-of-the-art fiber broadband network to communities represented by the Miami Valley Communications Council (MVCC).

Delta Air Lines’ flight from Cincinnati/Northern Kentucky International Airport to Paris is scheduled to return.  Spirit Airlines said it will inaugurate flights from Cleveland Hopkins International Airport to Miami International Airport in November.  American Airlines is adding a twice-daily flight from Cincinnati/Northern Kentucky International Airport to Austin.

Resources

• Ohio Department of Health’s COVID-19 Website: coronavirus.ohio.gov
• JobsOhio’s resource portal and information about Open, Secure Supply Chains in Ohio.