Magazine article Economic Trends

Employment Trends in Pennsylvania

Magazine article Economic Trends

Employment Trends in Pennsylvania

Article excerpt

11.14.14

Pennsylvania's unemployment rate was 5.7 percent in September. This put the state close to the middle of the distribution of state unemployment rates, ranking 20th, as well as below the US average of 5.9 percent. Additionally, the state has seen its unemployment rate fall fairly sharply in 2014. Among the 50 states, it's experienced the 8th largest decline (1.1 percentage points, tied with 5 other states) during the year.

These data seem like a good indication of conditions in the commonwealth's labor market, though recent unemployment rate changes have been associated with declines in the labor force. From December 2013 to September 2014, Pennsylvania's labor force fell by 76,791 workers, or 1.2 percent. This compares with an increase nationally of about 0.6 percent over the same time span.

One way to understand the significance of these developments is to hold the labor force constant after December 2013, and assume that the roughly 77,000 workers who were in the labor force in December 2013 had not left by September 2014 and had remained unemployed. Doing so would produce an unemployment rate in Pennsylvania of 6.8 percent, entirely eliminating the 1.1 percentage point decline in the official measure since the end of last year.

A survey of establishments by the Labor Department provides another perspective on the state's labor market. According to this survey, the state's employment growth in 2014 is on pace to slightly exceed its employment growth in 2012 and 2013. However, this pace (0.6 percent) is considerably weaker than that for the US (2.0 percent). Indeed, outside of 2010, Pennsylvania's employment growth (in percentage terms) has consistently lagged behind that of the US throughout the recovery. As a result, Pennsylvania has yet to fully recover the jobs it lost in the Great Recession. The US, by contrast, achieved this milestone in May of this year.

Year-over-year employment growth rates (September 2013 to September 2014) were similar to those noted above--0.6 percent for the commonwealth versus 1.9 percent for the US. Several relatively large sectors, like retail trade, manufacturing, and leisure and hospitality, experienced no employment growth or outright declines over this period in Pennsylvania, even as these sectors saw gains nationally. …

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