Pennsylvania’s May Unemployment Report Raises Some Concern

Pennsylvania’s jobless rate dipped one-tenth of a point to 7.4% in May.  Some economists are concerned about the numbers, because the seasonally adjusted number of non-farm jobs dropped by 14,200. 

Mark Price, labor economist for the Keystone Research Center in Harrisburg says the May jobs report raises concerns that a renewed weakness in the national economy is being felt in Pennsylvania.

Price says the weakness was widespread in May’s state numbers; there was weakness in almost every major sector.  He says the public sector continued to shed jobs, and we have not seen the full impact of public sector layoffs because budgets are still being finalized.

 Price says we will have to see if these numbers continue or if the May report is just a bump in the road. He points out Pennsylvania has added just under 80,000 jobs since the end of the recession.   

He believes we’re still far off from the risk of a double dip recession, but Price says a bigger concern is growth remaining too slow.   He says that would signal a long, slow, painful recovery.  He says state and local governments would continue to struggle because they won’t have a lot of the revenue they had in the past and a lot of families will have trouble making ends meet. Price says what we need is much faster growth.

State Capitol Facing North Office Building

Lawmakers Strike Unemployment Compensation Deal

The compromise ensures that some 45,000 unemployed Pennsylvanians won’t lose their extended federal benefits next week.  It will also save the unemployment compensation system about $114-million dollars a year.  “It is the most extensive unemployment compensation reform package that we have seen – it’s the only unemployment compensation reform package we’ve seen – in ten years,” says House majority leader Mike Turzai (R-Allegheny).  “There are significant reforms that are being brought to the table.”   

Chairman of the House Labor & Industry Committee, Ron Miller (R-York), says they will freeze next year’s maximum weekly benefit at $573-dollars a week.  “There will be a zero percent increase for next year, and then a five year sliding scale that will be one percent the year after, one point one the year after, that is the cap, it can’t go above that,” Miller says. 

Other savings would come from a new requirement that unemployment compensation recipients actively search for work, and new rules concerning severance pay.  The savings in the deal that was struck Wednesday evening are greater than the $60-million projected savings in the original Senate bill, but much less than the original House bill.  The legislative process is on pace for Senate concurrence this Friday. 

The statewide unemployment rate currently stands at 7.4%, according to data just released Thursday by the Department of Labor & Industry.  It’s much lower than the national average, which remains above 9%, but Pennsylvania owes the federal government nearly $4-billion dollars it has borrowed to cover unemployment benefits during the recession.

Pennsylvania continues to add jobs

Pennsylvania continues to add jobs,  and the latest unemployment numbers continue to show improvement.  Pennsylvania’s seasonally adjusted unemployment rate for April was 7.5%,  down from 7.8% in March and 1.3 percentage points lower than April of 2010.  The year-to-year decline was the largest since June 1987.

Mark Price, Labor Economist with the Keystone Research Center, says Pennsylvania  has been adding around 6 thousand jobs a month on average.  He says the April report is a very good one on all fronts, but the state still has a very long road back to something approximating full employment, and conditions that will generate some wage and income growth.   Price says one potential drag on the recovery is possible job losses in the public sector due to budget cuts.

The national jobless rate for April was 9.0%, up from 8.8% in March.

A breakdown of Pennsylvania’s unemployment numbers is available at the Department of Labor and Industry’s website at