Tuesday, March 11, 2008

Good News! Regional Job Growth Much Higher Than Previously Thought

Each March, the Bureau of Labor Statistics adjusts its employment statistics, through a process called benchmarking, so that they more accurately reflect true job levels and changes. (The monthly reports are based on surveys, and can undercount jobs in some sectors or for small businesses.) In some years, job growth in the Pittsburgh Region has looked better after the benchmarking, while in other years, it has looked worse.

This year, our region looks much better. Based on the updated figures for 2007, there were over 8,000 more jobs in 2007 than in 2006, which is almost double what was previously thought. In the most recent month (January, 2008), there were 7,600 more jobs than in the same month the prior year, a 0.68% increase. By comparison, jobs nationally only increased by 0.72% in January, so Pittsburgh's job creation rate was almost equal to the U.S.

Although the data still indicate that job creation here slowed significantly in the last quarter of the year compared to the summer, the reduction in the U.S. economy was greater, and so Pittsburgh's job growth moved from being well below the national rate to almost identical to it. That suggests that rather than leading the way into the recession, as the unbenchmarked numbers in December indicated, Pittsburgh's economy is being more resistant. That would be similar to what happened in the 2001 recession, when Pittsburgh moved more slowly into the recession than the U.S. as a whole, although it also recovered more slowly. This is partly a function of the strong role that education and health services play in our economy, since those are non- or even counter-cyclical industries.

The biggest job creator from January 2007 to January 2008 was administrative support services (which includes a lot of call centers, temp agencies, etc.), where 3,800 net new jobs were created, followed by colleges and universities, with 2,600 more jobs, and construction, with 1,800 more jobs. Health care continued to grow, but at a slower pace than in the past (creating 1,500 net new jobs). Manufacturing jobs continued a slow decline, losing 1,400 jobs between January 2007 and January 2008.


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