Pittsburgh — Strong GDP Growth despite Little Employment Growth
May 2016 | PDF
While Pittsburgh-area per capita GDP grew at almost twice the pace of the state’s or nation’s in 2014 (the latest available data), employment levels have remained relatively flat in the metro area from early 2012—when the area fully recovered the jobs that it had lost during the Great Recession—through the third quarter of 2015. More recent data indicate that the area’s unemployment rate rose sharply in March, from 5.0 percent to 5.5 percent. However, the initial estimate of a metro area’s unemployment rate is subject to several revisions, which are sometimes sizeable.
Metro Area Snapshot
|Unemployment Rate||Median Home Values||Payroll Employment||Credit Card Delinquency Rates|
|March 2016||One-year change||March 20156||One-year change||September 2015 (thousands)||One-year change||2016:Q1||One-year change|
|Nearby metro average||4.5%||–0.4||$222,250||2.9%||1,576||1.5%||6.4%||0.3|
Source: Bureau of Labor Statistics/Haver Analytics.
The Pittsburgh metro area’s unemployment rate rose sharply in March, from 5.0 percent the previous month to 5.5 percent. The US Labor Department estimated that employment declined by 0.4 percent in March, while the labor force grew an additional 0.1 percent, resulting in the 0.5-percentage-point increase. This was the largest increase in the area’s unemployment rate since at least 1990 (equaled in January 2010). Nevertheless, metro area unemployment rates often see substantial revisions. For instance, the initial estimate for the area’s unemployment rate in December 2014 was 4.6 percent, which was subsequently revised to 5.3 percent.
Gross Domestic Product
Pittsburgh’s per capita GDP grew at almost twice the pace of the state’s or nation’s in 2014 (the latest available data). The area’s (nominal) per capita GDP grew by 3.0 in 2014, compared with increases of 1.7 percent for both Pennsylvania and the United States. Growth through the expansion to 2014 has also been more rapid locally: Between 2009 (the first year of the expansion) and 2014, the area’s per capita GDP has grown nearly 11 percent, compared with increases of 4.4 percent and 4.9 percent for Pennsylvania and the United States, respectively.
Employment levels have remained relatively flat in the Pittsburgh metro area since early 2012, when the area fully recovered the jobs that it had lost during the Great Recession. Between February 2012 and September 2015, employment in the area grew about 0.1 percent. Over the same period, Pennsylvania’s employment grew by more than 2.0 percent, while national employment grew almost 7.0 percent.
Employment Growth by Sector
Between September 2014 and September 2015, Pittsburgh-area employment continued to trend sideways, as it has since early 2012, growing 0.1 percent. Only a handful of sectors saw employment increases over this period (construction, leisure and hospitality, and professional and business services). These gains were almost entirely offset by declines in other sectors. By contrast, the nation as a whole experienced employment gains across nearly all major industry groups. The one exception was employment in mining and natural resources (not pictured), which fell about 6.0 percent nationally, and nearly 9.0 percent locally.
Relative Employment Growth
Industries that made up about 30 percent of the area’s total employment in September 2014 (construction, leisure and hospitality, and professional and business services) experienced employment gains over the subsequent year. However, industries representing the remaining 70 percent of employment experienced losses that were approximately equal to those gains.
Income Per Capita
Throughout the expansion, the Pittsburgh metro area’s per capita income growth has been similar to that for the United States and Pennsylvania. Between 2009 (the first year of the current expansion) and 2014 (the most recent year for which we have data), the Pittsburgh metro area’s per capita income grew 6.5 percent. That compares with growth of about 6.0 percent in both Pennsylvania and the United States. For 2014, the annual increase in per capita income was slightly stronger statewide and nationally—about 2.0 percent versus a gain of 1.6 percent in the metro area.
Per capita consumer debt levels declined throughout the first several years of the expansion, generally stabilizing in 2014. Since the end of 2014, per capita consumer debt levels have begun to trend up slightly, growing more than 3.0 percent in the Pittsburgh metro area, 1.0 percent statewide, and about 0.5 percent nationally.
Credit Card Delinquency Rates
Credit card delinquency rates appear to have largely stabilized since the end of 2014. While delinquency rates in the Pittsburgh area were about a percentage point above the national average just prior to the Great Recession, the opposite is true more recently. As of March 2016, credit card delinquency rates in the Pittsburgh area were more than a percentage point below the national average, and almost a percentage point below the statewide average.
As of March 2016, the Pittsburgh area saw a year-over-year increase in home prices of almost 2 percent. Nationally, average home prices rose roughly 4.5 percent over the same period. Nevertheless, because home price changes in the Pittsburgh area were rarely negative during the last ten years, annual home price increases averaged about 2 percent during this time (March 2006 to March 2016), but were slightly negative nationally.
The issuance of residential building permits throughout the Pittsburgh metro area fell in 2015. In 2015, permit issuance averaged about 180 per month. That compares with average issuance of about 350 permits per month in 2013 and 2014. Through the first three months of 2016, permit issuance has averaged about 150 per month. These trends are notably at odds with issuance nationally or statewide.
|Pittsburgh Metro Area||United States|
|2014||Change from 2009||2014||Change from 2009|
|Adults with less than a high school diploma||7.0%||–1.9%||13.1%||−1.7%|
|Adults with an undergraduate degree or higher||31.7%||+3.8%||30.1%||+2.2%|
|Median age (years)||43.0||+0.7 years||37.7||+0.9 years|
|Median household income||$52,601||+2.2%||$53,973||−3.2%|
Sources: American Community Survey, Census population estimates.
Demographics and Education
According to 2014 US Census Bureau estimates, Pittsburgh, Pennsylvania, is the 23rd largest of the 381 metropolitan statistical areas in the United States.