Up is down
One of the bigger examples of Pittsburgh pessimism I have heard in recent years is that whenever I point out how the local unemployment rate has been well below the national level a common retort is that Pittsburgh always trails going into recessions... the implication is that things will get as bad here, we just need to wait. Yet that pattern has not really been true for some time. I broke down some of the historical data on recessions nationally and locally in a newsletter a few months ago. You can see that here if you want to look at that data some more. What it shows is that in the most recent recessions, we did indeed trail in, but also peak much lower which is a far different perspective on the trends leading into a recession.
But here we are. 7.9% unemployment. Not great.. But a far cry from 10.0 nationally. A few factoids of note. As I have talked about in the past, for things like migration trends the 'relative' unemployment rate is probably more important than the absolute level. By my count this now makes it 38 continuous months that the Pittsburgh region's unemployment rate has been below the nations. Still not a record, there was a 38 month period between starting in January 1990 and a 40 month period starting in 1973. But in the early 1990's, the local unemployment rate was very marginally below the nation.. averaging 4/10ths of a percent below the nation. Over the previous 12 months, the local unemployment rate has averaged 1.7 percentage points below the nation.
One thing to keep in mind for everyone who likes to compare recessions past vs. present or elsewhere vs. here. In lots of past recessions the local labor force data was bad despite the mostly unemployed folks streaming out of the region, making local metrics look better than the underlying economic conditions. This time around I am pretty sure there is a net inflow of folks from elsewhere in the country where conditions are much worse than here... if true that would imply the local labor force metrics make things look worse than the local economic conditions are causing. Why? Just think about what happens as unemployed folks move in search of work, or move for jobs they have found and how that impacts the size of the labor force in the places they leave vs. the places they are going to. In that sense, no matter how the unemployment rates compare, there really is no comparision to Pittsburgh's past experiences with recessionand this one.
Here again is my graph of how we have compared. My past interactive chart of the local unemployment rate is still online, but I have not updated it in some time. I added the red line there to show the current Minus 2.1 percentage point difference in the data just released. It ties a single month in April of 1975 with a similar difference. You will also see how different the current period is in terms of magnitude of difference between the two unemployment rates. Once you look at the area underneath the curve, you will see we are way past any comparision to the early 1990's or really to the 1970's at this point..I would argue that the area underneath the curve is a measurement of the cumulative performance of the local economy in the recession,
If the image is too small for you, you should be able to click on it to get a larger version: