By Anthony Hennen | The Center Square
(The Center Square) – Labor force participation hasn’t recovered to pre-pandemic levels, and job openings have fallen, but Pennsylvania employment gains “remain strong.”
The monthly economic update for August from the Independent Fiscal Office has a cautiously optimistic tone, with positive results from four leading economic indicators. For job openings, changes in payroll jobs, and unemployment insurance claims, the numbers are moving in a positive direction.
“July payroll employment increased over the prior month and the change in payroll jobs remains well above the pre-COVID monthly average,” the report noted.
While Pennsylvania had 393,000 job openings in June, a decline from May, its openings remain above the pre-COVID average, showing the demand for labor. Unemployment insurance claims, too, are down. “The average number of new claims fell to 8,100 in July 2022 and the number of UI claims remains below the pre-COVID average,” the report noted.
Pennsylvania employers are still hiring and searching for new workers. However, the commonwealth’s labor force participation rate gives a less-bright outlook.
“The LFPR increased since January, but has been stagnant at 61.7% since May 2022 and remains well below the pre-pandemic average (62.8%),” the report noted. While a lower participation rate isn’t always a bad thing – it could indicate more older workers have retired, or younger workers are earning a degree or credential instead of working – it can indicate that some would-be workers have given up on finding a job.
Regardless, the state’s economy continues to grow, though it may be slowing down.
“The latest monthly data continue to show solid gains in payroll employment and relatively strong (though diminishing) desire for new hires by businesses,” the report noted. “If net hiring (i.e., change in payroll jobs) continues, even at a moderate pace, then that would be a reliable indicator that the state economy has likely not entered into recession.”
Nationally, however, Pennsylvania lags behind the average state.
The commonwealth’s 4.3% unemployment rate in July is worse than the national average of 3.5%. Wages and salaries have also grown at a slower rate: While they increased almost 11.9% last quarter in Pennsylvania, they grew by 12.2% nationally. That reflects a trend of Pennsylvania’s gains lagging the national average by about 1 percentage point every quarter.