Ohio Gov. John Kasich received a little good news from his budget director Thursday when the Monthly Financial Report, which reviews recent national and state economic news and data and then projects forward, painted a mixed picture of an economy still recovering from the worst of the economic storm of recent years that's nonetheless plodding forward.
State still in recovery
Gov. Kasich, who wants the road to his reelection in two years paved with upbeat news that can validate economic plans and programs his administration has undertaken, was told that he can expect slow but uninterrupted growth of an economy still recovering from the worst recession since the Great Depression more than 70 years ago.
Slow but uninterrupted growth is what state budget director Timothy S. Keen told Gov. Kasich and Lt. Gov. Mary Taylor in the report released yesterday.
Real Gross Domestic Product expanded by 3.1 percent in the third quarter of 2012, up from the initial estimate of 2.0 percent and growth of 1.3 percent in the second quarter. Nationally, total nonfarm payroll employment increased by 155,000 jobs in December, and the October and November increases were revised up by a total of 14,000 jobs.
The unemployment rate, however, remained unchanged at a revised 7.8 percent compared with an average of 8.1 percent during the previous twelve months.
For Buckeyes, total nonfarm payroll employment increased by 1,600 jobs in November and is up by 103,200 jobs year-to-date. The Ohio unemployment rate decreased from 6.9 percent to 6.8 percent in November and stands a full percentage point below the national unemployment rate. This represents the second consecutive reading below 7.0 percent. The rate is down from 8.1 percent last November and a full percentage point below the national unemployment rate.
Although it said that leading economic indicators have weakened recently, expectations going forward are for slow but uninterrupted growth at a modest pace across the country and especially in Ohio.
Despite slow growth at the national level over the summer, the Ohio economy continued to make progress through November. Based on work performed by the Federal Reserve Bank of Philadelphia, an Ohio index composed of nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate and real wage and salary disbursements that combines these four state-level indicators to summarize current economic conditions increased 0.2 percent in November, for the 35th increase in a row.
Other report highlights:
- Household income and spending picked up in November after a miss in October.
- Real disposable personal income jumped by 0.8% in November after declining on balance during August-October.
- The saving rate little changed at 3.4%. The saving rate remains well below the peak of 6.7% reached during the financial crisis in May 2009.
- Chain store sales increased slightly.
- Better job growth and a notable decline in gasoline prices from September through year’s end probably contributed positively to spending.
- The mood of consumers deteriorated significantly in December, reflecting soured views of the outlook, but stable assessments of current conditions.
- The 3-month moving average of housing starts increased 4.5% in November to the highest level since August 2008.
- Homebuilders continue to face buyers that have high debt levels, have large inventories of unoccupied houses in many markets, and struggle with still-challenging labor market conditions and expectations of little or no price appreciation.
- Sales of existing homes increased 1.5% percent in November.
- Sales of newly built homes increased 0.9% percent in November.
- The inventory of existing homes declined in November relative to the pace of sales.
- Home prices posted a ninth-straight increase in October. (Cleveland home prices are up 3.4% from the low point, but remain 18.5% below the peak reached in January 2006.)
- December Commercial Activity Tax receipts to the General Revenue Fund totaled $3.7 million and were $2.5 million (211.2%) above the monthly estimate.
Gov. Kasich defeated a Democratic governor in 2010 who had the bad luck of having his term too closely coincide with the onset of the Great Recession. Gearing up for his reelection campaign, the supply side governor who as an 18-year Congressman was molded by Ronald Reagan and then by Newt Gingrich, would love nothing more than to confront his Democratic challenger with a steady record of job creation.
Slow and steady, as they say, wins the race. For Gov. Kasich, moving forward at a slow and steady pace is far preferred to falling behind.
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