ACE Report: Jobs drop in September, but outlook is optimistic

For the second straight month, Northeast Ohio registered a decline in the size of its payrolls, as calculated in the Ahola Crain’s Employment (ACE) Report.

In September, seasonally adjusted employment decreased by 1,657 jobs, to 1,172,402 last month from 1,174,059 in August, according to the ACE Report data. That followed a decrease of more than 3,600 jobs from July to August.

Both goods-producing and service-producing companies in Northeast Ohio shed jobs in September, the ACE Report found. Payrolls related to goods production fell by 1,539, and service-related regional payrolls fell 118.

September’s payroll number of 1,172,402 was below the region’s three-month (1,174,728) and six-month (1,174,286) averages, according to the ACE Report data.

However, Jack Kleinhenz, the Cleveland Heights economist who created the ACE Report model, noted that employment in Northeast Ohio “continues to remain in positive territory for the year, as there were 6,012 more jobs in the seven-county Cleveland/Akron region than the (like) month a year ago.”

Kleinhenz said in an analysis of the most recent data that there are “a lot of moving parts impacting Northeast Ohio economic activity, including seasonal forces in August and September, thus making it difficult to infer that slower growth is ahead.”

He noted that while employment measures “are important, they leave out other key information (that is) included in other economic series.”

For instance, Kleinhenz said he keeps a close eye on a “coincident economic index” produced for each state by the Federal Reserve Bank of Philadelphia. The index includes four factors: employment; average hours worked in manufacturing by production workers; the unemployment rate; and wage and salaries incorporating employment.

In August, he said, the coincident index for Ohio increased 0.3%, and it has risen by 3.4% over the past 12 months. These “are favorable figures when compared to the nation’s 0.24% and 3%, respectively,” Kleinhenz said.

He also found reason for optimism in the results of the Institute for Supply Management’s nonmanufacturing index. That index “rebounded strongly in September to 57.1 from 51.4 in August, well above market expectations and its highest reading since October 2015,” Kleinhenz said.

Meanwhile, he said, the ISM manufacturing index rose to 51.5 from 49.4, which “suggests a modest pickup in business activity in September.”

Kleinhenz concluded, “The improvement as measured by these indexes, though a bit uneven, holds out hope that a pickup in economic activity is underway for the remainder of 2017 and should provide the basis for future payroll gains for the Northeast Ohio region.”


Seaonally adjusted data

Month Non-Farm Small (1-49) Mid-Sized (50+) Goods-producing Service Producing
Mar-16(actual) 1,175,919   478,541   697,378 215,829 960,090
April (est) 1,171,228   476,564   694,664 215,938 955,290
May (est) 1,175,950   478,462   697,489 217,154 958,796
Jun (est) 1,174,351   477,788   696,562 217,180 957,170
Jul (est) 1,177,724   479,087   698,637 218,863 958,861
Aug (est) 1,174,059   477,748   696,311 216,000 958,059
Sept (est) 1,172,402   477,160   695,242 214,460 957,941

Recent Month’s Estimated Change

Date Non-Farm Small (1-49) Mid-Sized (50+) Goods-producing Service Producing
Aug ’16 to Sept ’16 (1,657)   (588)   (1,069) (1,539) (118)
Diff from Sept 2015 6,012   2,592   3,420 (980) 6,992


Date Non-Farm Small (1-49) Mid-Sized (50+) Goods-producing Service Producing
3-month 1,174,728   477,998   696,730 216,441 958,287
6-month 1,174,286   477,802   696,484 216,599 957,686