TOLEDO, Ohio (WDTN) – Ohio’s immediate economic outlook hinges on three major issues: How well schools handle the potential COVID-19 spread when students return to classes; when the federal government passes a second stimulus bill and getting the surge of cases in rural counties under control.
These are the factors that most concern Bill Adams, a Senior Economist with PNC Financial Group.
“The worsening of the pandemic in some parts of Ohio is quite discouraging for the economic recovery,” Adams told WDTN.com on Thursday. “Looking at some countries outside the U.S. they are starting to see consumers returning to more normal behavior. They are beginning to go out to restaurants and they’re seeing the beginning of the recovery of the tourism industry. That will be very difficult to realize in Ohio with so many people still afraid to venture out.”
Adams said getting consumers to venture out to restaurants and stores will be what ultimately ends the recession. Numbers released by the Ohio Department of Jobs and Family Services on Thursday showed jobless claims in Ohio fell 21,000 for the week ending on Aug. 2. Nationally, unemployment claims have fallen 17 of the past 19 weeks, according to PNC financial data, and are down 86 percent from their peak of 7 million in May.
Adams said he is very concerned about the stimulus and unemployment benefits that expired at the end of July. The Senate and Congress have been battling trillion-dollar plans and have made little movement. President Trump signed several executive orders on Saturday, asking FEMA funds to be redirected to $300-per-week in bonus unemployment insurance, student loan help and other benefits.
“Going forward, number one, is there an extension of stimulus measures that expired at the end of July?” Adams said. “Without that, we will see a $75 billion per month drop in aggregate household income going forward. And number two, will we see a resurgence in the pandemic with some schools coming back and going to in-person instruction?”
Adams said the initial stimulus bill, the Coronavirus Aid, Relief and Economic Security Act, helped provide a rapid recovery, but from a low level. He said without a second stimulus bill soon, state and local governments will be facing major cuts and household income will fall.
“We are already in the middle of August, half a month has passed, and we are going to start seeing an impact in the reduction of payments to households in economic data this month,” Adams said. “A major issue for Ohio going forward is going to be state and local government funding. The mandate for a balanced budget means they are going to require large cuts in government spending.”
One economic sector is showing promising growth
While the pandemic has sent many sectors of the economy reeling and people seeking new jobs, two are showing gains – e-commerce and logistics.
“The parts of the economy that are growing in Ohio and across the country are the parts that don’t require as much face-to-face interaction,” Adams said. “E-Commerce and logistics industry, delivery services and any businesses which support e-commerce – that’s where we are starting to see jobs added and that’s where we will continue to see growth going forward as that sector of the economy becomes larger.
For information on Ohio’s economy, visit the Bureau of Labor Statistics website.