August Jobs Report: National Weakness Spreads to Pennsylvania

Publication Date: 
September 19, 2011

August Jobs Report: National Weakness Spreads to PennsylvaniaDownload the Full Policy Brief (PDF)

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Overview

The unemployment rate in Pennsylvania is once again on the rise having increased by eight-tenths of one percentage point since May of this year. Similarly, since April, non-farm payrolls in the Commonwealth have fallen by 9,300 jobs. The weakness we are seeing in the national economy is being felt here in Pennsylvania. The August report clearly demonstrates the need for a jobs plan to meet the vast challenges our economy currently faces.

Figure 1: The Unemployment Rate in Pennsylvania Remains Very High

Employment Change by Industry

Because industry-specific jobs data are particularly volatile on a month-to-month basis, one-month changes should be viewed with considerable caution. Examining trends over three- and six-month periods provides a somewhat better sense of what is happening with employment (see Table 1). By volume, the weakest sectors in the last three and six months have been Government, Education and Health Services, and Information. By volume, the strongest sectors have been Trade, Transportation, and Utilities, Professional and Business Services, Manufacturing, Mining and Logging, and Other Services.

Table 1: Change in Employment in the Last Three and Six Months by Major Sector

We have two sources of data on employment, the Current Population Survey (CPS) and Current Employment Statistics (CES). Other than a short burst of growth in the spring which has now been completely reversed, the CPS has registered essentially no employment growth since October 2009. Employment in the CES, by contrast, is up by more than 100,000 jobs over the same period. Growth in the CES has weakened considerably over the last several months and as of August remains 9,300 jobs below its recent April 2011 peak.

Figure 2: Seasonally Adjusted Employment in Pennsylvania, January 2009 to August 2011

How Does Job Growth in Pennsylvania Compare to Surrounding States

Although job growth has stalled in recent months, the Commonwealth has continued to outperform most states’ interims of job growth. In the last two years, Pennsylvania saw the third highest rate of job growth out of the 50 states by volume and the 11th highest in percentage terms (Table 2). Pennsylvania’s economy, as a result, has produced a greater percentage of jobs than neighboring states.

Table 2: August 2009 to August 2011, Seasonally Adjusted

The Jobs Deficit

When the recession began in December 2007, Pennsylvania had 5,809,600 jobs. As of August, Pennsylvania has 126,000 fewer jobs than it did when the recession began. This number, however, fails to capture the jobs required to keep pace with growth in the working-age population.
Pennsylvania’s jobs deficit, or the difference between the number of jobs Pennsylvania has and the number it needs to regain its pre-recession employment rate, is 240,700. That number includes the 126,000 jobs Pennsylvania lost plus the 114,700 jobs it needs to keep up with the 2% growth in population that has occurred in the 44 months since the recession began.

Figure 3: The Jobs Deficit