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Fourth District Employment Conditions

The Fourth District’s unemployment rate has continued to increase over the summer months from a low of 8.5 percent in April to a current reading of 8.8 percent for July. The increase in the District unemployment rate since the spring can be attributed primarily to an increase in the number of people unemployed (3.5 percent), while the labor force has remained relatively stable (-0.3 percent). The District’s current rate is very close to the national unemployment rate (only 0.3 percentage points lower), which is slightly atypical as it has often run higher than the national rate in recent years. Relative to October 2009, when both rates peaked, the District has seen unemployment rates fall by 1.7 percentage points, while the nation saw rates fall by 1.0 percentage points.

Figure 1. Unemployment Rate

The distribution of unemployment rates among Fourth District counties ranges from 6.3 percent (Delaware County, Ohio) to 17.3 percent (Jackson County, Kentucky), with the median county unemployment rate at 9.8 percent. Fourth District Ohio counties populate 51 percent of the upper half of the distribution, while Fourth District Kentucky and West Virginia counties make up 45 percent and 4 percent, respectively. County-level patterns are reflected in statewide unemployment rates, as Ohio and Kentucky have unemployment rates of 9.0 percent and 9.5 percent, respectively, compared to Pennsylvania’s 7.8 percent and West Virginia’s 8.1 percent.

Figure 2. County Unemployment Rates

There are significant differences in unemployment rates across counties in the Fourth District. Of the 169 counties that make up the District, 54 had an unemployment rate below the national rate in July and 116 counties had a rate at or higher than 9.1 percent. Roughly half of the District’s counties continue to report double-digit unemployment rates, indicating that the District labor market remains under considerable stress. Geographically, unemployment remains the highest in remote areas of Ohio and Kentucky, while rural Pennsylvania shows marked improvement.

Figure 3. Unemployment Rate, July 2011

In general, the depth of employment declines within states during recessions is positively correlated (0.53) with employment gains in those states during the subsequent recoveries. This business cycle is different so far, as states that saw the largest employment declines during the past recession have seen little, if any, employment gains during this recovery. However, compared to pre-recession trends, payroll growth during the recovery has been stronger for those states that generated relatively fewer jobs over the 2002 to 2006 period. It is encouraging that the employment growth rates in Kentucky (2.0 percent), Pennsylvania (1.7 percent), and Ohio (1.2 percent) have all exceeded the nation’s (0.7 percent) during the recent recovery.

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