Tuesday, April 28, 2009

Go Figure: Unemployment R Us

No hiding, the unemployment rate data out today is bad no doubt. The full blow by blow from the state is online here. But some perspective at least in a few factoids:

  • As of March, number of consecutive months the Pittsburgh unemployment rate has trailed below the US rate: 30.

  • How much of the recession have we missed thus far? Average unemployment rate in 2008 for the US: 5.7, for Pittsburgh: 4.1

  • Last year that that the local unemployment rate (annually) was so far below the US: 1976

  • Percentage of months in the last 30 years that the local unemployment rate has been at 7.2 or higher? 29%

  • and if nothing else... Pirates attendance is up. an economic indicator? Probably not.
Note that the Trib version of the bad news points out in its last full paragraph that the local labor force actually went up despite the bad unemployment rate number. In fact, seasonally adjusted the size of the local labor force is just a tiny bit (as in a small fraction of a percentage point) below its all time high which was hit just the month prior. Again I think that is mostly reflecting migration patterns of workers in particular between Pittsburgh and some of the regions we normally swap population with. So unlike some past recessions which were indeed periods of massive population loss for the region, the opposite may be true this time around. We won't have enough data to confirm that either way for some time, but if that is really at the root of the unemployment rate increases.. it makes this all a very different event than past recessions for us.

and again, my rust belt watch:

Unemployment Rates: Pittsburgh, Cleveland, Detroit - 2000 to March 2009

Detroit only increased unemployment rate a bit, from 13 to 13.2% and Cleveland actually came down a bit from 8.5 to 8.3%. I'd read more into that but my call is that these little moves pale in comparison to what the impact will be dependent on the outcome of all the machinations in the auto industry. If GM really slices jobs as much as they are saying they want to or either GM or Chrysler really go through a bankruptcy in one form or another than who knows what will be the result.

What is getting to Pittsburgh? You just can't ignore the sheer impact the credit crisis had everywhere. Difficult credit has and will be impacting a wide range of investment for a long time... and as much as we talk about a new Pittsburgh, there still is a steel and manufacturing industry here. The global steel industry in particular has pretty much gone from dead to deader across the board and similar stories can be found in almost all durable goods production. With slumps in both construction and auto manufacturing in the fall reaching near epic proportions, you are seeing steel production bottom out as well.

But stimulus is coming right? Has to be a lot of steel in the infrastructure coming down the road. Even if that happens, manufacturing employment is at its lowest levels ever in Pittsburgh... if not in sheer numbers than in proportion of the workforce. Sometimes I think words like post-industrial are overused, but we may really define it at this point. In fact, long before this recession I would point out that our location quotient in manufacturing employment was below 1.0.. that means that we are less of a manufacturing region than the US is on average across the nation. Think about that some. It is even more extreme now.


Anonymous Anonymous said...

The metro population increased in the early 90s. This recession is much worse, so should we not expect to see an increase? Additionally, with the region appearing to be performing better than the nation and many specific areas, should that not make the chances of net migration be even better?

Do you think the dynamics at hand could make Pittsburgh have some migration momentum once the recession ends, or will the region fall into bad out migration like the 90s?


Tuesday, April 28, 2009 2:14:00 PM  
Blogger C. Briem said...

Time will tell on some of that.

Early 90's the diference in how well we were doing vs. the US when in a recession was not as pronounced as now. There was also natural population gains for the first half of the 90's. Good to keep both of those in mind.

but the big question you are asking is what about after the recession. I think a lot of the structural changes here are not the result of the recession and will continue... But what migration may look like in the 5-10 years post recession? In the 1990's a lot of other regions really superheated in the mid to late 1990's after pulling out of the earlier recession. So it's not that we were doing badly, but the pull of certain regions was pretty strong and clearly impacted us. Will that happen again. Seems like there will be policies in place to inhibit some of that exuberance.

Just things to think about.

Tuesday, April 28, 2009 2:35:00 PM  
Anonymous DBR96A said...

What's up with Cleveland's graph? It was perfectly flat for several months, then shot up dramatically, and now it's down. Did they just not bother to collect data for a few months there?

Aren't the labor pools in Cleveland and Detroit both shrinking? If so, then it must really be bad there for both their unemployment rates to be skyrocketing the way they are. We've closed the gap on Cleveland, but then again, our labor pool is growing.

Tuesday, April 28, 2009 10:52:00 PM  

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