Sunday, July 19, 2009

A Little Good News, At Last

If you’ve been wishing for a little good economic news, the Pittsburgh Region got some in June. After four straight months of accelerating job losses from January through May, jobs actually improved by a small amount in June. The metro area’s 12 month job losses now stand at 31,200 (a 2.7% loss between June 2008 and June 2009) vs. 32,000 last month (a 2.8% loss from May 2008 and May 2009). (Note that these are twelve-month changes, not one-month changes. Due to seasonal factors, the number of jobs ALWAYS increases from May to June. However, if that May-to-June increase is smaller than in other years, it means that jobs have been lost, and if it’s bigger, it means that jobs have been gained. This year, the increase in jobs from May to June was bigger than it was last year, both in absolute and percentage terms, which means that job losses measured on an annual basis were smaller.)

The small uptick here appears to be a function of the unique structure of our region’s economy, not improvement in the national economy, since the U.S. economy did not improve in June. In fact, the twelve month rate of job loss nationally worsened from just under 4.0% in May to just over 4.2% in June, while it improved from 2.8% to 2.7% in our region.

Moreover, among the top 40 regions, Pittsburgh was one of only 13 which did better in June than in May. A number of other regions did much worse, including sunbelt regions like Charlotte, San Diego, and Silicon Valley, as well as Cleveland and Detroit.

Overall, our region remains well below average in job losses during the recession. The Pittsburgh Region has the 12th lowest rate of job loss among the top 40 regions. Detroit has the worst rate of job loss – it has now lost 175,000 jobs in the past year – 1 out of every 11 jobs. Cleveland has lost 63,000 jobs, more than twice as many as Pittsburgh. Charlotte has lost 54,000 jobs, which is twice as many in percentage terms as our region.

Although the news in Pittsburgh overall is good, it’s still bad in some important economic sectors in the region. The region’s manufacturing sector continued to lose jobs at an accelerating rate in June. We have now lost over 10% of the region’s manufacturing jobs in the past year. That’s the 12th biggest drop in manufacturing jobs among the top 40 regions. Job losses in both the financial sector and in wholesale trade also increased in June, and while the healthcare sector continued to add jobs, the rate of job creation slowed, which reduced its ability to offset losses in other sectors. The rate of job creation in the natural resources and mining sector also slowed significantly in June, although this represents only about a hundred jobs.

On the other hand, jobs in the leisure and hospitality sector, which had been a major contributor to overall job losses in the region, recovered slightly in June. Although jobs in this sector always increase in June, the growth between May and June was actually larger here than in the previous two years, whereas nationally, it was smaller. However, even with this small improvement, our leisure and hospitality workers have experienced the 8th worst loss of jobs among the top 40 regions over the past year.

Jobs in Pittsburgh’s retail sector also improved in June. Retail workers here have not suffered nearly as much as those in other parts of the country in the past year. We’ve lost 2.2% of our retail jobs (2,800 out of 130,000 a year ago), compared to losses of 5% or more in places like Milwaukee, Charlotte, Denver, and Baltimore.

It’s too early to call this the beginning of a recovery for the region. It’s only a small improvement – one-tenth of a percent. It’s only one month, which is not enough to declare a trend; in fact, job losses also reversed slightly back in January before they headed downward in the following four months. And the data are still preliminary and subject to revision next month. However, there’s a possibility that the revisions may make things look even better -- the revised data for May were slightly better than the preliminary data reported for May a month ago (the revised figures show our region lost 32,000 jobs from May 2008 to May 2009, compared to the preliminary figure of 33,600 reported previously), so hopefully any revisions to the June figure will also make things look better here, not worse. And hopefully, July will confirm that job losses have actually stabilized.


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