Meet the Author

Kathryn Holston |

Research Intern

Kathryn Holston is an intern in the Research Department of the Federal Reserve Bank of Cleveland. She joined the Bank in June 2013 and her primary interests include macroeconomics, consumer finance, and international economics.

Meet the Author

Kyle Fee |

Economic Analyst

Kyle Fee

Kyle Fee is an economic analyst in the Research Department of the Federal Reserve Bank of Cleveland. His research interests include economic development, regional economics and economic geography.

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07.02.13

Economic Trends

The Pittsburgh Metropolitan Statistical Area

Kathryn Holston and Kyle Fee

The Pittsburgh Metropolitan Statistical Area (MSA), home to almost 2.4 million people, is the District’s largest metropolitan area. (The MSA is composed of Allegheny, Armstrong, Beaver, Butler, Fayette, Washington, and Westmoreland Counties.) Surprisingly, Pittsburgh’s share of employment in manufacturing is smaller than the nation’s. This wasn’t the case in the 1970s and early 1980s, but since then, manufacturing’s share of total employment has fallen faster in Pittsburgh than in both the U.S and the rest of the state. Manufacturing accounts for 8 percent of employment in the Pittsburgh MSA, compared to 10 percent in Pennsylvania and 9 percent in the nation as a whole. On the other hand, the metro area’s share of employment in the education and health services industry is 1.4 times larger than the nation’s. In 2008, it surpassed trade, transportation, and utilities to become the MSA’s largest sector. It has remained the MSA’s largest sector following the recession, accounting for one-fifth of total employment in 2012.

Since the last business cycle peak in December 2007, jobs in Pittsburgh have increased by 1.8 percent, compared to Pennsylvania’s loss of 1.2 percent and the nation’s loss of 1.7 percent. Pittsburgh’s employment growth remained stronger than the state’s and the nation’s throughout the recession. In contrast, Pittsburgh fared worse than Pennsylvania and the nation in the period from 2001 to 2006.

Since the last business cycle peak, Pittsburgh has increased its nonmanufacturing employment by 2.7 percent, whereas the U.S. is down 0.4 percent. In addition, manufacturing employment losses over this period were more severe in the nation (14 percent) than in the metro area (10.6 percent).

Almost every component of employment growth fell during 2009, when overall nonfarm employment growth for the metro area and the nation were at their lowest levels in the past six years. However, every sector with the exception of government and other services posted positive employment growth in 2011 and 2012. For every year except 2009, professional and business services and the leisure, hospitality, education and health sectors were drivers of job growth. This is not surprising considering that the education and health services sector is the largest in the MSA in terms of employment.

Since December 2011, Pittsburgh’s employment has increased 0.8 percent, compared to the nation’s gain of 1.7 percent. Although U.S. employment growth outpaced that of the metro area, the only industries that posted job losses in Pittsburgh were trade, transportation, and utilities; manufacturing; and government. Moreover, Pittsburgh’s rate of employment growth in mining and logging industries outpaced the nation’s by more than 5 percent. The MSA also saw significant growth in construction, which increased by 3 percent, and financial activities, with 3.6 percent growth.

The MSA’s unemployment rate closely tracked the nation’s from 2000 until 2007. During the most recent recession, Pittsburgh had a lower unemployment rate than the U.S., and in the years following the recession the MSA’s unemployment rate has been significantly less. In December, the MSA’s seasonally adjusted unemployment rate was 7.3 percent, compared to 7.9 percent in Pennsylvania and 7.8 percent in the U.S.

With the exception of three years in the early 1990s, Pittsburgh’s population growth rate was consistently negative between 1980 and 2009. By contrast, the nation’s population grew steadily during that period, at an annual rate of about 1 percent. In the past three years, the metro area has had a small but positive population growth rate. In contrast, the nation’s population growth rate has declined slightly since 2009.

Pittsburgh’s population, like Pennsylvania’s, has a smaller percentage of minorities than the U.S, although the MSA is still more homogenous than the state. Of Pittsburgh residents aged 25 and older, 29.4 percent have attained a bachelor’s degree, compared to 28.5 percent for the nation and 27.0 percent for the state. Pittsburgh is home to more elderly residents (65 and older) than either the state or the nation and has a higher median age.

Selected Demographics

 
Pittsburgh
Pennsylvania
U.S.
Total population (millions)
2.4 12.7 311.6
Percent by race
     
 
White
87.7 82.3 74.1
 
Black
8.4 10.8 12.6
 
Other
3.9 6.9 13.3
Percent by age
     
 
0-19
22.6 24.8 26.6
 
20-34
18.4 19.0 20.4
 
35-64
41.9 40.8 39.6
 
65 and older
17.2 15.5 13.2
Percent with bachelor’s degree or higher
29.4 27.0 28.5
Median age
42.6 40.3 37.3

Source: U.S. Census Bureau, 2011 American Community Survey.
Update, 7/17/13: 2007 data were replaced with 2011 data.

In 2011, Pittsburgh’s per capita personal income was $44,982, exceeding that of the state ($42,291) and the nation ($41,560). The MSA’s per capita personal income has surpassed that of Pennsylvania and the U.S. each year for the past two decades.