PA Labor Markets Continue Sluggish Pattern in August

PA Labor Markets Continue Sluggish Pattern in August

The September 15 release of August labor market data brought confirmation that the state has not been able to improve its underlying slow growth. Indeed, household survey data show the labor force falling by 30,000 in August from the July reading. Moreover, the August number was 22,000 under the August 2016 posting. Over the same period household employment rose only 18,000—that is the number of residents who report working in the week of the survey.

Meantime, seasonally adjusted nonfarm payroll employment fell by 8,000 from July to August led by a 10,400 drop in service jobs. The goods producing industries managed a 2,400 increase.

The problem is that all but two service sectors, finance and leisure and hospitality, reported job reductions. A major problem in PA is the fact that leisure and hospitality is accounting for almost half of all net nonfarm employment gains. This sector has the lowest average weekly pay of any sector with low hourly wages combined with very short work weeks.

And that is important because it means the overall income growth in the economy resulting from the slower than national job gains is modest at best. And that means weak tax revenue growth. Something the government in Harrisburg needs to keep in mind. The state’s economy, despite shale gas, is mired in a rut of slow growth. And it will not get out of that rut until it makes major changes in its regulatory environment and reduces the power of public sector unions.