Ohio unemployment rises for 1st time in 2 years

Ohio's unemployment rate rose in June for the first time in nearly two years, yet officials maintained Friday that the state's job market is still gaining strength.

Ohio's jobless rate increased to 8.8 percent last month, from 8.6 percent in May, the state's Department of Job and Family Services said. It was the first time unemployment went up since August 2009, when joblessness in the state reached a more than 25-year high of 10.6 percent and stayed at that level for months before beginning a long decline, department spokesman Ben Johnson said.

The unemployment rate rose in June, even as employers added more jobs. Payrolls outside of farms grew last month by 10,600, the department said.

Meanwhile, the number of workers unemployed in Ohio in June was 517,000, up from 508,000 in May.

The figures on new jobs and unemployed workers come from two separate surveys that were moving in different directions last month, Johnson explained. The conclusion to be drawn is that the recovery in Ohio's labor market slowed, he said.

"We expected to see some months where the recovery slowed, where the unemployment rate ticked back up," Johnson said. "In general, we think that the job market continues to slowly strengthen."

Conflicting numbers on unemployment and job growth could be explained by the private sector adding jobs while the public sector is still in the midst of budget cuts, said Mark Votruba, associate professor of economics at Case Western Reserve University in Cleveland.

Government shed 7,300 jobs in Ohio last month, representing the category seeing the most losses.

"So with those public sector jobs going away, those people are going to go immediately onto the unemployment rolls, so those people are going to have an offsetting effect, but that's going to plateau hopefully in the near future," said Votruba, who noted he had not yet reviewed the most recent state jobless report.

Also, Votruba said, as the economy recovers, workers who had dropped out of the unemployment count because they had stopped looking for jobs, begin new job searches and are again considered unemployed.

Behind government job losses, Ohio manufacturing saw a decline of 3,000 jobs, partly due to summer shutdowns at factories, Johnson said. The state's big job gainers in June were services, led by leisure and hospitality followed by educational and health services.

For the third straight month the state reported lower unemployment than the nation, showing that Ohio's economy is improving faster than the rest of the country, Johnson said. The U.S. jobless rate for June was 9.2 percent, up from 9.1 percent in May.

--- Associated Press Writer JoAnne Viviano contributed to this report.

(Copyright 2011 by The Associated Press. All Rights Reserved.)