Unemployment in the Fourth District
Unemployment rates for the Fourth District states of Kentucky, Ohio, and Pennsylvania were already on the rise before September 11. A lagging indicator of economic performance, the unemployment rate began rising for all three states in March 2001, which suggests that an economic slowdown was under way in the Fourth District before the onset of a national recession during that month. Year-over-year comparison of October unemployment rates also displays widespread evidence of a regional recession.
October 2001 local area unemployment statistics would be the first to register the terrorist attacks effects on local labor markets. Kentucky and Pennsylvania showed steep jumps in unemployment, similar to that of the U.S. as a whole. Surprisingly, Ohio's October unemployment rate showed no change, which suggests that the attacks did not affect Ohio's labor markets directly. This is consistent with reports in the Federal Reserve's Beige Book; for example. Fourth District companies in travel and tourism (an industry devastated by the attacks at the national level) noted that they had been relatively insulated from the attacks' negative impact.
Examining the change in unemployment at the county level between September and October yields unexpected results: Unemployment increases were not concentrated in areas within the District that rely heavily on travel and tourism or financial companies. For example, only two of the 10 counties in the Cincinnati-Hamilton metropolitan statistical area showed increased unemployment, but part of the reason is that excess labor capacity in the area's travel and tourism industry had already been shed: A poor economy, riots in April and September, a regional airline strike, and disappointing performances by local professional athletic teams had caused a serious decline in the area's tourist industry, long before September 11. …