In July, Ohio’s economy continued to show slow progress in emerging from the national recession, as the unemployment rate continued to decline slowly. Federal Reserve Chairman Ben Bernanke recently told Congress that the economic outlook remains “unusually uncertain,” referring to the current scenario in which some indicators look negative while others point positive.

US Gross Domestic Product (GDP) increased 2.4% in the second quarter, following a 3.7% increase in the first quarter.

Total employment decreased by 131,000, as 202,000 temporary Census jobs were completed, and private sector growth was not strong enough to offset these losses. Excluding the change in government jobs, employment increased by 71,000 jobs, which is stronger than the May-June average of 41,000, but weaker than the March-April average of 200,000.

Ohio employment decreased by 1,500 jobs in June, following strong increases in the preceding two months. This too was driven by the completion of the Census, as government employment fell by 10,400 jobs while private sector payrolls increased by 8,900 jobs. Ohio’s unemployment rate edged slightly downward to 10.5%, from a high for this cycle of 11% in March.

Personal income and consumption expenditures both remained steady from May to June, but were moderately lower than in March. After adjustment for inflation, consumption was up only 1.7% from a year earlier. Accordingly, the savings rate inched to a new high for the year of 6.4%, presumably as households are saving more due to concern over the economic environment. Consumer spending in and around Ohio was generally flat or slightly higher in the late spring.

The housing market continued to show sluggish growth, as new home sales increased moderately in June, but sales of existing homes and housing starts decreased again.

During the month of July, General Revenue Fund (GRF) receipts totaled $2,050.3 million, which is an 8.4% increase over last July. This year-over-year growth is almost entirely attributable to a combination of the growth of sales taxes and federal grants. GRF disbursements totaled $2,887.1 million, an increase of 3.2% over last July, with the largest increases going to Debt Service and Health and Human Services.

Please see the attachment for the complete Monthly Report.