Unemployment rate in Pa. drops to 8.1%, but economists remain wary
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The state Department of Labor & Industry reported Friday that Pennsylvania’s unemployment rate dropped to 8.1% in September, down 2.3 percentage points from August.
The current figure is nearly double the unemployment rate of September 2019, which was 4.6%. Still, Chris Briem, a regional economist at the University of Pittsburgh Center for Social and Urban Research, said the numbers are trending in the right direction.
“Certainly the headline numbers here are good because the unemployment rate came down. But what is also important is it appears that the labor force number has ticked up,” Briem said. “You don’t want the unemployment rate to be dropping because folks are dropping out of the labor force, and that doesn’t seem to be the case at the moment.”
Last April, as the government-mandated shutdown started, the unemployment rate in the commonwealth stood at 16.1%.
“Businesses are opening back up and the numbers are starting to get better for us, but I worry because the pandemic numbers are rising in Pennsylvania,” said Risa Kumazawa, associate professor of economics at Duquesne University. “If the covid numbers are going up, then perhaps the unemployment rate is not going to keep decreasing for us.”
Kumazawa said the unemployment rate by itself doesn’t give a clear picture of how the economy is really doing. She is concerned about utilities soon being shut off for people who can’t pay and how that will impact the economy going forward.
“We’re going to have a lot of people facing evictions. They can’t pay all of their bills and that impacts small businesses not getting any revenue from customers,” Kumazawa said. “If we don’t have any additional stimulus funds coming from the government, then I really worry about what’s going to happen with respect to the economy. I’ve seen some projections for small businesses going out of business this month and they are actually quite high.”
Briem said the circumstances created by the pandemic are making it challenging to know what’s going on in the labor force compared to more stable times.
“Once the public health restrictions were loosened up, you expected a lot of jobs to come back,” said Briem. “But based on the numbers we’re seeing, it’s too early to say where we’ll wind up once the public health concerns abate.”
Kumazawa said it doesn’t feel to her as though the state is going through a normal recovery.
“If you put all the pieces together, we’re not back to where we were. You can’t fix the economy if you don’t fix the pandemic first.”