Cleveland economy punctuated by an “encouraging reversal,” but growth remains slow
The recent rise in the unemployment rate has turned around for now
The Cleveland metro area’s unemployment rate fell on a year-over-year basis for the first time in 19 months in December. It’s an encouraging reversal of the recent trend that saw the region’s unemployment rate ticking up from post-recession lows.
“It will be important to watch if this reversal remains a lasting change in the local labor market in the coming months,” according to Federal Reserve Bank of Cleveland economist Joel Elvery. Cleveland’s unemployment rate of 5.4% in December remains above both the state at 4.7% and the nation at 4.1%.
Employment growth in the region has been slow. Major sectors such as education and health services and trade, transportation, and utilities shed nearly 3,000 jobs between June 2016 and June 2017. Professional and business services was the fastest growing sector over that period, adding more than 5,000 jobs, but Elvery adds important context.
“Although this growth was faster than that in Ohio and in the nation as a whole, the strong growth, in part, reflects a delayed recovery from a downturn in employment in this sector in late 2015 and early 2016,” he said. Growth has also been slowing in the trade, transportation, and utilities sector as consumers’ growing preference for online shopping changes the industry. “Amazon’s opening of two warehouses in the Cleveland metro area could add as many as 3,000 jobs and help to ease employment decline in this sector,” said Elvery.
There were encouraging signs of further recovery and stabilization in the Cleveland metro area’s housing market. The median home value in the region saw its strongest growth in more than a decade during 2017, with home values clocking growth of 5.3 percent year-over-year in December. In that period, the median home value in the Cleveland metro area rose to $137,000, slightly higher than the state average of $130,000, but well below the national average of $206,300.
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