Gone Baby Gone: Pennsylvania's September Jobs Picture

For the first time since the start of the Great Recession, unemployment in Pennsylvania moved above the U.S. jobless rate in September, reported the state Department of Labor and Industry on Friday.

Over most of the Great Recession and economic recovery, the state's unemployment rate remained about a percentage point below the U.S. rate. As of September, that advantage is gone, with Pennsylvania's rate of 8.2% exceeding the national rate of 7.8%. 

The figure above indexes the size of the labor force, employment and the number of unemployed to their levels September a year ago. The household survey (LAUS) is showing slow but steady growth in both the labor force and employment in Pennsylvania over the last 12 months. The number of unemployed began to rise sharply starting in May of this year. You will note a similar but much more understated pattern last summer. Barring a wave of unexpected layoffs in the public or private sector, I'm expecting unemployment to resume its downward trajectory over the next several months.

What's The Matter With The Middle Atlantic?

According to the Bureau of Labor Statistics (BLS), the unemployment rate in Pennsylvania, New York and New Jersey is essentially unchanged compared to September a year ago (Table C). The unemployment rate in the U.S. fell to 7.8% in September; it was 9% a year ago.

The chart to the right, like the previous, indexes the total number of unemployed in Pennsylvania, New York and New Jersey to levels a year ago. Throughout the Middle Atlantic states, there has been a rise in the number of unemployed over the last year (you can see a similar, although more modest, pattern last summer). The number of unemployed in the U.S. since September last year has fallen 13%; the same number is up 4.2% in Pennsylvania, 8.1% in New York and 4.9% in New Jersey.

The employment picture is not all bad in the Middle Atlantic states. Total nonfarm payrolls as measured by the establishment survey (CES) are up by 0.7% in Pennsylvania, 1.4% in New York and 1.1% in New Jersey. Nonfarm payrolls in the U.S. as a whole grew by 1.4% over the last 12 months. 

State Leading Indexes (PDF) published by the Federal Reserve Bank of Philadelphia predict overall economic expansion for New York and New Jersey through the first quarter of next year. Unfortunately, the leading index for Pennsylvania is showing a slight contraction of economic activity over the same time period.

The employment situation in all three states and the U.S. could have been much better had all three been able to avoid the layoffs of teachers and other education professionals. My preliminary estimate based on data from the Quarterly Census of Employment and Wages (QCEW) is that employment in elementary and secondary schools fell between the 2009-10 and 2011-12 school year by 5.5% in New Jersey, 4.3% in New York, 6.5% in Pennsylvania and 3.5% nationally.

As of September, we have our first hint of what employment in public education in the 2012-13 school year will be. Year-over-year employment in local government educational services is up by just over 2,000 in Pennsylvania, by over 6,000 in New Jersey and down by more 6,000 in New York.

The figure below presents the 12-month moving average of employment in local government educational services. I have to present a 12-month moving average because the data are not seasonally adjusted. Note also that in the case of Pennsylvania and New Jersey, the data presented include elementary and secondary schools as well as community colleges. In New York, the data are for only elementary and secondary schools. Finally, although school has started in September, peak employment in public education runs from October to May of each year. We will need a few more months of data to have a better sense of the picture in public schools in Pennsylvania as well as the rest of the Middle Atlantic states. Based on one month of data, a very weak foundation, public school employment in Pennsylvania appears to have stabilized.

I will be back later in the week with a more detailed exploration of job trends by industry in Pennsylvania.

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