Tuesday, September 06, 2016

Pittsburgh always fighting the last demographic trend

It was a bit odd reading the recent headline from a few weeks ago: Pittsburgh's Youth Exodus Revereses - Millennials are being drawn to Pittsburgh.

Reverses?  Compared to last year? The last decade?  Maybe it's been lot longer since Pittsburgh was losing young folk. Not that you would know it from the headline.

Still... the headline implies some positive demographic trend is just beginning when it may actually be at the end  For years the message that Pittsburgh was NOT hemorrhaging young folks was met with less than deaf ears.  It was very lonely not being negative. Even after years of the data showing clear net migration into Pittsburgh, and lots of other positive demographic trends, the Post Gazette itself would write editorials ("Reports of a population uptick are unproven") in utter denial of hard data and calling me out by name for having the temerity for not being more negative.  Of course my favorite was the letter to the editor in the Trib calling virtually all non-nabobism, especially mine, as "Unctuous Bafflegab".

Sorry.. truth is I'm not really sore about the latter. I'm really a bit envious of Mr. Brock's wordsmithing and wish I could turn a phrase so well.  His is the single reference that turns up in the entire Googleverse of the phrase 'Unctuous Bafflegab"

So now all of a sudden the news coverage says all is well. Our long demographic nightmare is over, or so you would think. The thing is that any trend of young people migrating to Pittsburgh story was clearly a reflection of some remarkable economic trends, but remarkable trends that have clearly ended. A regular meme here was tracking how Pittsburgh's unemployment rate dropped well below the national unemployment rate and remained below the national rate for an extended period of time.  My updated graphic of the region's  unemployment rate (United States minus Pittsburgh MSA rates) shows this:

That big block of green on the right end of the graph was a period of 100 straight months where the Pittsburgh region's unemployment rate was below the national average.  If you include a few months where the two rates were the same you can extend it out to say that it was 109 straight months, literally 9 years and a month, where the local rate was not higher than the national rate.  There has probably not been a longer period where Pittsburgh unemployment rates stayed below the national rates in at least the previous half century, and probably going back as far as unemployment rates were reported at a regional level. So a big deal, and probably resulting in  the net positive migration the Pittsburgh region experienced by Pittsburgh for probably 7 straight years.

So after 7 years of positive net migration for the region, the headlines finally came to believe things have changed.   But already the headlines are lagging data and the most recent shows the migration trend is again negative for the region.  What about the future?  Look at the graphic above again and look at the last year there and the red on the far right. You see that in 2016 the Pittsburgh region's unemployment rate gave up the ghost and shot up well above the national rate. Not just by a marginal amount either.  In June the local unemployment rate was 0.8 percentage points above the national unemployment rate.  You have to go back to 1988.. yes 1988, to find a month where Pittsburgh was faring that far below the nation. That relative migration metric is a great predictor of net migration at the metropolitan level, so the next couple of years at least its unlikely the region will be pulling too many folks from elsewhere.  It is not so much that Pittsburgh is doing horribly, in absolute terms the local unemployment rate is still well below historical levels, but the much lower national unemployment rate reflects economic conditions in other regions that are developing serious labor shortage issues that will limit reasons to move here. Simple and unavoidable economics.


Anonymous DBR96A said...

I'm just glad that the Pittsburgh MSA unemployment rate stayed below the national rate for 100 consecutive months. That's a nice, round milestone.

Looking at the year-over-year job growth numbers, it appears that most of the carnage is in sectors with direct or indirect exposure to the energy industry, and there's really nothing that can be done about that. Pittsburgh is still eking out small gains in most months (May being an oddball exception), but it appears that Pittsburgh's economy will now be more vulnerable to global energy market forces than before. Unfortunately, nobody knows when the energy market will rebound, so that could keep job growth slow in the near future.

FUN FACT: The Pittsburgh MSA added more jobs in June than the Houston MSA, year over year. Houston has taken an absolute beating in the last 12 to 18 months.

Wednesday, September 07, 2016 9:47:00 PM  
Blogger ChartWord said...

In economic and similar type graphics the color red is used for negative values and the color green is used for positive values

Thursday, September 08, 2016 6:38:00 PM  
Blogger C. Briem said...

ChartWord: Yes, indeed

Thursday, September 08, 2016 9:19:00 PM  

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