Ohio’s Unemployment Rate Fell to 4.7% in March

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: TSMC sees chip shortage lasting into 2022.  China’s economy likely grew 19% in Q1.
• U.S.: Factory production increased by the most in 8 months. Retail sales post largest gain in 10 months.
• Ohio: Ohio’s economy continues to recover with the unemployment rate falling to 4.7% and a labor participation rate holding steady at 62.1%. Ohio’s labor market is notably better than the national average.

Global Insights

Taiwan Semiconductor Manufacturing Co. (TSMC) will raise its capital spending budget and revenue growth forecast for 2021, a sign of confidence from the world’s biggest contract chip maker that soaring global demand for semiconductors will persist.  SK Innovation agreed to settle with its Seoul-based rival LG Energy Solution, a unit of LG Chem, to avert a 10-year import ban of its batteries into the U.S.

U.N. financial and vaccine officials are appealing for rich countries to donate excess COVID-19 vaccine doses. They also appealed for an additional $2B to buy up nearly 2B doses in 2021. Agricultural commodities are poised for a “mini supercycle” as China’s rampant demand keeps supplies tight.  China’s exports climbed 30.6% in March from a year prior as global trade recovery from the pandemic showed to be on track.  Imports jumped by 38.1%, beating expectations and leaving a trade surplus of nearly $14B for the month. China’s economy likely grew at a record pace of 19% in the first quarter.

U.S. Insights

Production at U.S. factories increased in March by the most in eight months as the sector showed solid growth after weather-related setbacks in February.  The 2.7% increase in output followed a 3.7% decline in February, according to data from the Federal Reserve.  Retail sales rose by the most in 10 months in March as Americans received their additional stimulus checks and additional vaccinations allowed broader access to the economy. Overall, retail sales rebounded 9.8% for the month, the largest increase since May 2020.  Consumer prices rose sharply in March as the economic recovery gained momentum, marking the start of an expected months long pickup in inflation pressures.

Unemployment claims declined to the lowest level (576,000 last week) since the pandemic struck last spring, adding to signs the U.S. economic revival is picking up speed.  Amazon clinched victory against a union drive at its warehouse in Alabama in a vote that captured national attention.  New York agreed to increase taxes on its most affluent residents and raise corporate franchise taxes, aiming to boost public finances without further hobbling an economy hit by the pandemic and lockdowns that have spurred remote work.

Airlines believe the rising demand they have seen in the past few weeks is likely to continue as more people are vaccinated.  American Airlines said it would fly 150 new routes this summer, and now expects to offer more than 90% of its pre-pandemic seating capacity within the U.S., and 80% of its international capacity.  United Airlines, which last month announced plans for more than two dozen new routes starting Memorial Day, recently told pilots in a town hall that over 40% of its flights from O’Hare International Airport are 90% full, a stark change from last spring when planes were flying nearly empty.  GM and LG Chem will build a $2.3B second EV battery plant in Tennessee as the first plant is currently under construction in Lordstown, Ohio.

Ohio Employment & Economic Insights

Ohio’s March 2021 unemployment rate fell to 4.7%.  New unemployment claims hit a five-month low last week, suggesting both an improvement in the state economy and a clampdown on fraudulent claims.  ODOT will invest $1.9B into 956 projects to improve transportation across the state in 2021.  The 2021 construction program includes improvements to 876 bridges and 4,596 miles of pavement.  Ninety-six cents of every dollar invested will go toward making sure existing roads and bridges are in good condition and as safe as possible.

Four Ohio companies were featured on Fortune’s Best 100 Companies to Work For 2021 edition.  Nationwide (#25), Southern Ohio Medical Center (#28), Progressive (#40), and OhioHealth (#49), all made the list which features companies that employ at least 1,000 employees.  Ohio ranked #8 for States with the Most Pandemic-Proof Small Businesses by WalletHub.  The share of Ohio small businesses still closed compared to January 2020, just prior to the onset of the pandemic, stands at 30.4%, the 21st highest percentage among 45 states examined, according to an online data tracker managed by Harvard University.

According to the latest Federal Reserve Beige Book, in the Cleveland district, “The pace of business activity accelerated in recent weeks… a decidedly more optimistic outlook for demand… An increase in capital spending plans… More firms also appeared ready to increase staffing, although their plans to do so were often constrained by a dearth of qualified applicants for open positions.  These labor constraints contributed to supply chain disruptions such as shortages of key inputs and freight and shipping delays…”

Resources

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