Pittsburgh — Staying Steady
2015:Q2 | PDF
Early in 2015, Pittsburgh’s unemployment rate remained below the national average, where it has been throughout the expansion. Nevertheless, recent employment increases in the area have been limited. While Pittsburgh’s per capita income growth moderated in 2013, this was still better than the experience for the United States as a whole, where per capita incomes fell. The area’s per capita consumer debt levels (excluding student loans) fell slightly in 2014, while credit card delinquency rates remained low—more than a percentage point below the national average at the end of 2014. Finally, home price appreciation remained robust in the area in early 2015. Read more…
At the end of 2014, the Pittsburgh metro area’s unemployment rate remained below the national average. In December it stood at 4.6 percent, a full percentage point below the US average at the time. Throughout the expansion, the area’s unemployment rate has been below the national average, sometimes by more than 2 percentage points. This is a departure from the previous two expansions, when the Pittsburgh metro area’s unemployment rate tracked the US average fairly closely.
Gross Domestic Product
Pittsburgh’s real per capita GDP growth continued to outpace the gains seen nationally in 2013. That year, the area posted a growth rate of 1.9 percent, versus a national increase of 1.2 percent. From 2009, the year the expansion began, to 2013, the most recent year for which we have data, Pittsburgh’s real per capita GDP grew at an annual rate of about 2.1 percent, more than double the nation’s growth rate over the same time period.
Home price appreciation remained robust in the area in early 2015. According to Zillow, Pittsburgh posted a year-over-year increase in the firm’s Home Value Index of more than 3 percent, compared to national gains over the same time period of about 5 percent. Though the 3.3 percent gain was down from a year ago (when year-over-year increases for the area approached 9 percent), the most recent reading is still generally above what the area experienced for most of the recovery prior to the summer of 2013.
Recent employment increases in the Pittsburgh metro area have been limited. From the fall of 2013 to the fall of 2014 (the most recently available data), the area’s employment grew by only 0.2 percent. By contrast, statewide employment grew by almost 1 percent over the same time period, while US employment growth exceeded 2 percent. Though the Pittsburgh area returned to its pre-recession employment levels more quickly than most major metro areas or the nation, its employment has moved mostly sideways since.
Employment Growth by Sector
The limited employment growth in the Pittsburgh metro area is, of course, evident in its industry segments. Outside of mining and natural resources—where employment expanded by nearly 12 percent—all other industry segments saw weaker employment gains in the Pittsburgh area than in the United States between September 2013 and September 2014. Notably, the area experienced employment declines over this period in the manufacturing, government, and financial sectors.
Relative Employment Growth
While manufacturing, government, and financial activities experienced employment declines from the fall of 2013 to the fall of 2014, these declines were offset by modest employment increases in larger sectors, such as professional and business services, trade, transportation, and utilities, and education and health services. The mining and natural resources (not pictured) and construction sectors saw the largest gains among the area’s major industry sectors, but also employ a relatively small share of workers.
The recent decline in residential building permits in the Pittsburgh metro area was driven almost entirely by a sharp drop in issuance in January. Setting aside volatile 2015 data and focusing instead on recent annual averages, average monthly permit issuance in 2013 and 2014—which was above 350 permits—exceeded average issuance in the recession and recovery years of 2008 through 2012. Nevertheless, 2013 and 2014 averages remain well below those common in the last thirty years. For instance, issuance routinely exceeded 500 permits per month in the last expansion. This pattern is similar to that for the US, where permit issuance remains low relative to recent decades.
Consumers continued to reduce their debt levels in 2014, albeit at a slower pace than in recent years. The Pittsburgh metro area’s per capita debt levels (excluding student loans) fell slightly in 2014 (−0.2 percent), while the declines in Pennsylvania and the United States were 1.4 and 1.6 percent, respectively. The pace of deleveraging was much more rapid earlier in the expansion. From the beginning of the expansion in mid-2009 to the end of 2013, the Pittsburgh metro area’s per capita debt levels fell at an annual rate of about 2.5 percent. Nationally, the annual rate of decline during this period was about twice as great (−5.3 percent).
Credit Card Delinquency Rates
The Pittsburgh metro area’s credit card delinquency rate remains well below the national average. At the end of 2014, this rate stood at about 6.2 percent, more than a percentage point below the national average. While mounting financial stress during the Great Recession drove delinquency rates noticeably higher nationwide and statewide, no such pattern is evident in Pittsburgh. Instead, after peaking above the US average just prior to the recession, credit card delinquency rates generally drifted down in the area over the subsequent seven years.
Average Weekly Earnings
Real weekly wages for private sector workers in the metro area fell in 2014 after rising robustly during the expansion. In 2014, the area’s inflation-adjusted weekly wages fell more than 4 percent. By contrast, the increase for the United States exceeded 1 percent, while Pennsylvania posted a slight gain. The story is strikingly different from mid-2009, when the expansion started, to the end of 2013. During that period, Pittsburgh’s real weekly wages rose at an annual rate of 3 percent, twice the increase statewide (1.5 percent) and far in excess of that for the nation (0.4 percent).
Income Per Capita
Pittsburgh’s per capita income growth moderated in 2013, rising only 0.1 percent. Nevertheless, this was better than the experience for Pennsylvania or the United States as a whole, where per capita incomes fell in 2013 when compared with 2012. Pittsburgh’s performance was also better in the preceding years of the expansion. From 2009 to 2012, Pittsburgh’s per capita income grew at an annual rate of about 2.3 percent, compared with growth rates of roughly 1.6 percent for the nation and state.
|Pittsburgh metro area||United States|
|2013||Change from 2009||2013||Change from 2009|
|Adults with less than a high school diploma||7.5%||−1.4%||13.4%||−1.3%|
|Adults with an undergraduate degree or higher||32.2%||+4.4%||29.6%||+1.7%|
|Median age (years)||42.8||+0.5 years||37.5||+0.7 years|
|Median household income||$51,680||+1.9%||$52,646||−4.2%|
Sources: American Community Survey, US Census Bureau population estimates.
Demographics and Education
According to the 2013 US Census Bureau estimates, Pittsburgh is the 22nd largest of the 381 metropolitan statistical areas in the United States.