Economist: Data shows Ohio is ‘treading water’

There’s bad news for the Buckeye State.

As worries about the economy permeate the national political discussion, the chief economist at Moody’s Analytics listed Ohio among the states “treading water.”

“State-level data makes it clear why the U.S. economy is on the edge of recession,” Mark Zandi wrote in a post to X, formerly Twitter. “Based on my assessment of various data, states making up nearly a third of U.S. GDP are either in or at high risk of recession, another third are just holding steady, and the remaining third are growing.

“States experiencing recessions are spread across the country, but the broader DC area stands out due to government job cuts,” Zandi added. “Southern states are generally the strongest, but their growth is slowing. California and New York, which together account for over a fifth of U.S. GDP, are holding their own, and their stability is crucial for the national economy to avoid a downturn.”

Zandi told Newsweek that warning signs, so-called “red indicators,” are showing up everywhere, including housing, employment, and consumer prices.

“I don’t think the economy is in a recession, at least not at this point, “but it feels like it’s on the brink, it’s on the precipice of this recession,” Zandi told the publication.

Brighter Labor Days?

However, in an op-ed published in Crain’s Cleveland Business leading up to Labor Day, Rea S. Hederman Jr., the vice president of policy at The Buckeye Institute, said Ohio’s future Labor Days look bright.

“Ohio now boasts a higher labor market participation rate than the national average, and businesses that once fled the state for cheaper overseas labor have started to return,” Hederman wrote.

“Data centers, advanced manufacturing plants and tech-heavy defense contractors have flocked to central Ohio, bringing low- and high-skill jobs and competitive wages with them,” Hederman added. “Across the state, private-sector job growth averaged 5,000 new jobs in the first six months of 2025 as high-tech companies hire construction workers, plumbers, electricians, drivers, administrators, engineers, data analysts, and scientists.”

Hederman said that Republican Gov. Mike DeWine and state lawmakers made significant progress by adopting a single, flat-rate income tax of 2.75%. The rate will be the country’s second-lowest and will help state employees hire and retain talent.

“Flat taxes reduce inefficiencies, increase fairness and transparency, and make tax liabilities easy to estimate,” Hederman wrote. “More importantly, low flat taxes spur economic growth and make states more competitive than their peers. So it is not surprising that, according to the Tax Foundation, most of the fastest growing states in the country have been southern and sunbelt states with either a low flat tax or no income taxes at all.

“Ohio workers and families have much to celebrate,” Hederman added. “Despite the state and national unemployment rate climbing, the state’s economy continues to rise and overcome broader challenges by embracing new technologies and attracting new and growing firms. Policymakers have pursued pro-growth energy and tax reforms that make Ohio more attractive to employers and more rewarding to employees.”

Unemployment Claims Drop

Last week, the Ohio Department of Job and Family Services said that Ohioans filed 4,976 initial unemployment claims for the week of Aug. 17 through Aug. 23. That was 188 fewer than the previous week, and officials said that roughly 624 were flagged to ensure they are not fraudulent.

Ohioans also filed 45,949 “continued unemployment claims” last week, which was 1,480 fewer than the previous week. The number of claims filed for the week totaled 50,925.