This report is a summary of third-party economic research and perspectives to foster communication with business and economic development stakeholders.
Key Economic Insights
- Global: OECD lowered its growth forecast for the U.S. economy to 6% from the 6.9% projected in May and trimmed its global growth forecast to 5.7% from 5.8%.
- U.S.: The Federal Reserve lowered its 2021 GDP forecast to 5.9% and raised the GDP growth projections for 2022 and 2023 to 3.8% and 2.5%, respectively.
- Ohio: Area Development ranked Ohio #9 Best State for Doing Business in 2021.
44.9% of the world population has received at least one dose of a COVID-19 vaccine. The U.S. will purchase an additional 500M COVID-19 vaccines to donate to low- and lower-middle-income countries around the world. Through September 2022, the U.S. will ship out nearly 800M vaccines, which will bring the U.S. total to over 1.1B vaccines donated.
The Organization for Economic Cooperation and Development (OECD) lowered its growth forecasts for the global and U.S. economies in 2021, the first downgrade since December 2020. OECD lowered its growth forecast for the U.S. economy to 6% from the 6.9% projected in May and trimmed its global growth forecast to 5.7% from 5.8%. IHS Markit’s Flash Eurozone PMI Composite Index was 56.1 in September, a new 5-month low. The Services PMI reading was 56.3, a 4-month low. Manufacturing PMI was 55.6, a new 8-month low.
63.6% of the U.S. population has received at least one dose of a COVID-19 vaccine, and over 55% is fully vaccinated. The Federal Reserve left short-term rate targets at 0 to 0.25% but projected it will raise rates in 2022 to about 0.3% and it will end 2023 near 1%. The Fed lowered its 2021 GDP forecast to 5.9%, down from 7% in June. GDP growth projections for 2022 and 2023 were raised to 3.8% and 2.5%, respectively. The Fed’s year-end inflation expectations were raised to 4.2%, up from the 3.4% estimate in June. The central bank will continue to buy $120B a month in Treasury bonds and mortgage-backed securities but signaled that continued progress in the economy may soon warrant tapering of asset purchases.
Initial jobless claims for the week ended September 18 totaled 351,000, above estimates for 320,000. Continuing claims also increased, rising 181,000 to a total of 2.84M. The Conference Board Leading Economic Index (LEI) for the U.S. increased by 0.9% in August to 117.1, following a 0.8% increase in July. The flash U.S. PMI Composite Index reading fell to 54.5 in September, a new 12-month low. The Services PMI reading was 54.4, a 14-month low. Manufacturing PMI was 60.5, a 5-month low.
Homebuilder sentiment improved for the first time in three months as lumber prices eased and buyer demand grew. The NAHB Market Index for September rose to 76 after falling 5 points in August to a one-year low of 75. U.S. housing starts rose by more than expected in August, as residential starts rose 3.9% to a 1.62M annualized rate, above estimates for 1.55M. Backlogs climbed to the highest level since 2007. Houses that are authorized but not yet started rose to the most since 1979. Building permits increased 6% in August, the biggest gain since January. Existing home sales declined 2% in August from July to a seasonally adjusted annualized rate of 5.88M unit. Sales were 1.5% lower than August 2020, marking the first annual decline.
Ohio Employment & Economic Insights
More than 6.25M Ohioans ages 12 and up have started the COVID-19 vaccination process, nearly 63% of the population currently eligible for COVID-19 vaccines. Area Development ranked Ohio #9 Best State for Doing Business in 2021. Ohio ranked among the top 10 states in several individual categories, including Site-Readiness Programs (#4), Available Real Estate (#4T), Corporate Tax Environment (#6), Logistics & Infrastructure (#7), Workforce Development Programs (#8), and Cooperative & Responsive State-Government (#10). Versus 2020, Ohio improved in Site-Readiness from 7th to 4th, and in Available Real Estate from 5th to 4th.
The Cincinnati Innovation District announced its Inaugural Advisory Council, including national business leaders, each with a connection to Cincinnati and the state of Ohio whose focus will be to provide executive-level expertise and guidance, connect potential opportunities to the district and help demonstrate to the nation and the world Ohio’s commitment to growing, attracting and retaining talent. Tech workers in Cleveland saw an average 4.5% increase in annual salaries last year, despite the economic impact of the pandemic. The growth in salaries outpaced the national average of 3.6% and placed Cleveland among the top 25 tech hubs in the country, according to recent report from Dice. A recent analysis from The Business Journals ranked Cleveland (#7) and Toledo (#22) among the top 30 metros where jobs have recovered the strongest since the start of the Covid-19 economic crisis in April 2020.
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