Job Growth in Pittsburgh Doubles in 2007 (by Harold Miller)

New figures from the Pennsylvania Department of Labor and Industry and the U.S. Bureau of Labor Statistics show that the Pittsburgh Region created 8,400 jobs in 2007, almost double the number created in 2006 (4,300).  And despite the looming recession, the job growth rate in January 2008 stayed almost as high.  The region had 7,600 more jobs in January 2008 than January 2007. 

Why are the numbers so much better than previous reports?

Each March, the Bureau of Labor Statistics adjusts its employment statistics, through a process called benchmarking, so that they more accurately reflect true job levels and changes. (The monthly reports are based on surveys, and can undercount jobs in some sectors or for small businesses.) In some years, job growth in the Pittsburgh Region has looked better after the benchmarking, while in other years, it has looked worse.  This year, we look dramatically better.  (Whereas previously it was reported that December 2007 had only 900 more jobs than December 2006, the revised number is 5,200.)

The 7,600 jobs in January compared to January 2007 represents a 0.68% increase in jobs. By comparison, jobs nationally only increased by 0.72% in January, so Pittsburgh's job creation rate was almost equal to the U.S.

How do we compare to other regions?  Although the Pittsburgh Region is still below average, it's improved considerably from where it had been.  Our job growth rate in 2007 over 2006 was 0.74%.  12 of the top 40 regions had slower growth, including some that may surprise you -- we had faster job growth than sunbelt cities like Los Angeles, Miami, San Diego, and Tampa, as well as Cleveland, Detroit, Minneapolis, and St. Louis.  In January 2008, the Pittsburgh Region had faster job growth than 14 of the top 40 regions, including Baltimore and Chicago.

Although the data still indicate that job creation here slowed significantly in the last quarter of the year compared to the summer, the reduction in the growth rate of the U.S. economy was greater, and so Pittsburgh's job growth moved from being well below the national rate to almost identical to it. That suggests that rather than leading the way into the recession, as the unbenchmarked numbers in December indicated, Pittsburgh's economy is being more resistant. This is similar to what happened in the 2001 recession, when Pittsburgh moved more slowly into the recession than the U.S. as a whole, although it also recovered more slowly when the U.S. economy began to improve. The difference between Pittsburgh and the U.S. is partly a function of the strong role that education and health services play in our economy, since those are non- or even counter-cyclical industries.

The biggest job creator from January 2007 to January 2008 was administrative support services (which includes a lot of call centers, temp agencies, etc.), where 3,800 net new jobs were created, followed by colleges and universities, with 2,600 more jobs, and construction, with 1,800 more jobs. Health care continued to grow, but at a slower pace than in the past (creating 1,500 net new jobs). Manufacturing jobs continued a slow decline, losing 1,400 jobs between January 2007 and January 2008.

Although Pittsburgh's job growth in 2007 is good news, it's important to note that the total number of jobs in Pittsburgh is still over 8,000 below the levels in 2000-2001, i.e., we still haven't fully recovered from the 2001 recession. However, we have some interesting company -- the same is true of Boston, Chicago, San Francisco, and Silicon Valley, as well as Cleveland, Detroit, and Milwaukee

The complete dataset, including comparisons to benchmark regions, will be available soon on the PittsburghToday website.