Monday, January 28, 2013

Tale of two charts

With December data recently out.  More and more workers in Pittsburgh, and another new all-time high in the size of the regional labor force. Bigger observation is that the rate of labor force growth here is not slowing down either. In fact, for December it was the largest year over year increase in the region's labor force in over 15 years:

But the proportion that are are working in the mills is within an insignificant digit of its all-time low. Now down to 7.5% as of December.



Anonymous DBR96A said...

What's crazy is, the size of the labor force at the nadir of this latest recession was about the same as it was at the peak before the previous recession.

Tuesday, January 29, 2013 9:00:00 AM  
Anonymous Anonymous said...

The Trib and PG both have interesting takes on the new employment data. PG takes a refreshingly positive tone (at least until Ann Belser returns) and the Trib seems somewhat more pessimistic than usual...citing a PNC economist saying the regional economy is flat.

I think we need to check our expectations at this point...we can roaring out of the recession, it's only natural for the growth to slow down...right?

Tuesday, January 29, 2013 9:18:00 AM  
Blogger Jake said...

Can you explain the difference between 'Civilian Labor Force of Pennsylvania' ( and 'Employees on Nonfarm Payrolls' (

The Labor Force graph shows a more significant jump than the employees graph. They sound like the same information, but perhaps this is a noobie mistake.

Wednesday, January 30, 2013 9:52:00 AM  
Anonymous BrianTH said...

The labor force count includes both the employed count and unemployed count. The unemployed count includes only people actively looking for work. During a serious employment recession, the labor force tends to shrink as some people without jobs become discouraged and stop actively looking for work. When the subsequent employment recovery starts taking off, some of those people tend to start actively looking for work again, causing the unemployment count and the labor force count to spike back up, often faster than the employed count is increasing during that period.

The other thing that can happen is jobseekers migrating from places with relatively high unemployment rates to places with relatively low unemployment rates. Depending on the pace at which the receiving labor market is capable of putting those people to work, those jobseeking migrants can cause both the unemployed count and labor force count to increase faster than the employed count.

At a guess, a bit of both those effects are in evidence in the recent spike in the Pennsylvania labor force. I might note that people have been speculating that various unusual factors might have been constraining migration earlier in this economic cycle, such that there was less jobseeking migration than you would ordinarily expect. If those constraints are starting to ease, you might see a spike in jobseeking migration.

Wednesday, January 30, 2013 11:32:00 AM  
Anonymous BrianTH said...

"we can roaring out of the recession, it's only natural for the growth to slow down...right?"

That's probably right, but I would add two caveats. One is just that the Pittsburgh area employment count was actually increasing pretty nicely in the last few years before the recession, so I wouldn't necessarily expect employment count growth to slow down to below that pre-recession pace.

The other caveat is that it seems at least possible we are looking at an extended period of increased net in-migration of jobseekers (and their dependents), which could itself help create a faster-growing employment count, because they increase the labor pool available to potential employers, are themselves consumers of locally-produced goods and services, and so forth.

Wednesday, January 30, 2013 11:45:00 AM  
Anonymous Anonymous said...

Still seems a bit odd...with so many baby boomers in the 'burgh, you think their retirement (labor pool dropout) would kind of cancel out the effects of the in-migration. Not sure how to explain such a spike.

Wednesday, January 30, 2013 12:03:00 PM  
Anonymous BrianTH said...

Part of the issue locally is that the unemployed count, and therefore the labor force count, may just be overstated. See the "Labor Force Metrics 101" post from 8/28/2012:

That said, I wouldn't overlook the possibility of recent changes in net migration dynamics outweighing the relatively slow labor force effects caused by underlying demographic shifts. In fact, as the first chart demonstrates, the Pittsburgh area was already on the negative end of that proposition back in the 1980s. Conversely, that means the area is facing less of a disemployment effect through age-related retirement in the next couple decades than you would otherwise have expected (because many of those retirees are currently living and working elsewhere thanks to the 1980s diaspora of younger workers).

Finally, note that net in-migration can be increased either by more people coming or fewer people leaving, and as Chris discussed back in August, the region's universities produce a lot of new potential entrants into the labor force every year. Historically many of those people leave and enter other labor forces, but that in turn means a significant reduction in the percentage of local graduates leaving could by itself have significant effects on the net migration count and local labor force count.

Personally, I would again agree the recent labor force increases are unlikely to be sustained indefinitely, and may be at least in part overstated. But I do think it is more likely than not that we are going to experience a period of relatively robust net in-migration and relatively robust labor force and employment growth.

Wednesday, January 30, 2013 12:40:00 PM  

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