Ohio’s Unemployment Rate Declined to 8.4% in September

Key Takeaways

• Global: World’s governments have committed $11.7T (12% of global output) to fight the coronavirus-induced economic downturn.
• U.S.: Economists said pandemic could end up costing U.S. $16T, four times as costly as last recession.
• Ohio: Ohio’s unemployment rate was 4% in September 2020, down from 8.9% in August. Cleveland Innovation Project announces initiatives to propel region’s growth.  Columbus named the happiest city in Ohio, and one of the happiest in the U.S., according to Zippia’s latest study.

Global Insights

Italy broke its previous record for most COVID-19 infections in a single day. London will enter a tighter lockdown. President Macron of France announced night curfews in Paris and other major cities. As Europe introduces more restrictive measures, WHO’s regional director in the region said full-scale lockdowns should be a “very, very last resort.”

The IMF projects the global economy will contract by 4.4% in 2020 - an upward revision from -4.9% made in June. Governments globally have committed $11.7T (12% of global output) to fight the coronavirus-induced economic downturn. The Bank of England appears to be moving closer to adopting negative interest rates. The UN reported the FAO Food Price Index rose in September. The International Energy Agency said the pandemic speeds a shift in investment from fossil fuels to cleaner energy. World Bank President Malpass expressed concern that 1B children in developing countries may be out of school as a consequence of the pandemic.

U.S. Insights

U.S. jobless claims unexpectedly increased to 898K last week, signaling the economy’s pace of recovery is slowing down. Economists estimate that the pandemic will exact a $16T toll on the U.S. - four times the cost of the Great Recession - when adding the costs of lost lives and health to the direct economic impact. Nearly 13M Americans were unemployed in September – 7M more workers than pre-pandemic levels, while permanent job loss grew to 3.8M, suggesting some temporary layoffs have become permanent. Large corporations announced job cuts in recent weeks, including AT&T’s WarnerMedia, Walt Disney and Allstate. The State of New York put economic development grant funding on hold.

After hitting a record high in Q2, the number of U.S. corporate ratings downgrades fell to its lowest level since Q4 2018. Auto sales fell more than 9% year-over-year in 3Q 2020. Auto sales tracked up from a 33.3% decline in the second quarter. In third-quarter earnings reports this week, big banks are prepared for a wave of loan defaults expected in 2H 2021. Total weekly rail traffic in the U.S. was up 1.9% year-over-year for the week ending October 10. Reshoring of U.S. manufacturing presents its biggest opportunity in 70 years, according to product sourcing platform Thomas Net.

The pace of economic recovery is stalling for people of color, lower earners, women and workers with less education – groups more likely to report hardships. The number of people in poverty has grown by 8M since May. A new Quest Diagnostics study indicates misuse of fentanyl, heroin and nonprescribed opioids are rising due to the pandemic’s impact on healthcare access. There was a 20% increase over expected deaths in the U.S. between 3/1 and 8/1, per a study in JAMA. Three states with the highest death rates (New Jersey, New York, and Massachusetts) accounted for 30% of U.S. excess deaths but had the shortest epidemics. A new Yale study showed children in day-care programs present low risk of transmitting COVID-19 to adults. Undergraduate enrollment tumbled, shrinking by 4%.

Ohio Insights

Ohio’s unemployment rate was 8.4% in September 2020, down from 8.9% in August. The Cleveland Innovation Project announced its vision for how to establish Cleveland as a leading Midwestern region for technology-led growth and inclusion by 2030 at GCP’s Annual Meeting. Jones Lang LaSalle and Newmark Knight Frank reported growth in the industrial real estate market in Greater Cleveland continues to be the silver lining during the pandemic. Wal-Mart partnered with the Ohio Secretary of State office to distribute necessary PPE to Ohio’s county boards of elections as they prepare to administer the upcoming election. U.S. Secretary of Energy Dan Brouillette visits Eastern Ohio today. During his visit to participate in a roundtable with leaders from across the industry in Ohio at Youngstown State University, and then heads to Belmont County, Ohio to meet with local officials, and stakeholders regarding PTTGCA’s proposed Ohio Petrochemical Complex Project.

Positive Company-Specific News

• Workhorse secured $200M financing from institutional lenders.
• Construction of $126M Intelligence Production Center at WPAFB begins.
• Progressive Insurance posted an impressive Q3 performance with revenue up by 10.6% and earnings per share up 32.3%.
• Fifth Third Bank is bringing thousands of employees back to offices.
• CareSource announced its 4,400 workers would be working remotely until at least 2021.
• First Solar Series 6 is world’s first EPEAT-rated PV module.
• Olive announced a platform aimed at administrative healthcare workers to manage essential tasks.
• Cast Nylons North America’s largest cast nylon manufacturer, announced today that it will expand its operations in Willoughby.
• Long Ridge Energy Terminal will transition its 485 MW combined-cycle power plant to run on carbon-free hydrogen.
• Infosys next-generation digital services and consulting acquired Kaleidoscope Innovation.
• Radial is hiring for more than 1,000 seasonal fulfillment jobs in Groveport to support the upcoming holiday rush.
• Chargeurs Group will be adding 50 PPE related jobs at its Troy facility.
• RB Sigma pivoted to PPE manufacturing and has made 28M surgical and N95 masks since the beginning of the pandemic.
• Phoenix Quality Manufacturing is preparing to open its new manufacturing facility in Jackson with hopes to eventually make 6M N95 masks per month.
• Advanced and Innovative Multifunctional Materials debuted self-disinfecting N95 mask technology, developed with University of Dayton.
• Mpower Energy announced an expansion into Ohio with a facility in Columbus, hiring 50 workers to support expansion of renewables.
• Ensemble Health Partners will hire 250 as it continues to help its clients navigate the COVID-19 pandemic.
• EASE logistics has been named top 100 3PL and cold storage logistics provider by Food Logistics.

Negative Company-Specific News

• Riddell Sports of North Ridgeville will implement normal seasonal layoffs in addition to full-time, permanent layoffs.
• Probe into nuclear plant bailout examines facilities’ owner, Energy Harbor.
• Mallinckrodt Pharmaceuticals filed for bankruptcy this week while facing billions of dollars in legal costs after recent Opioid-related lawsuits. The company posted revenue of $3.2B in 2019, but net losses of nearly $1B.
• Restaurant chain Ruby Tuesday filed for Chapter 11 bankruptcy and will be permanently closing 185 restaurants, including several in Ohio. Company reported an ‘unprecedented impact by COVID-19’ as over 90% of its business comes from in-restaurant dining.

Resources

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