Unemployment has been historically low in Philly this year
For the first time in at least several decades, Philadelphia has averaged less than 5% unemployment over the past year.
Philadelphia is experiencing record-low unemployment, according to the most recent regional data available, generally keeping with national jobs trends. But after an unexpected jump in U.S. unemployment was reported Friday, it’s unclear what’s in store for the jobs landscape locally.
The August jobs report, released Friday by the U.S. Bureau of Labor Statistics (BLS), showed that employers added 187,000 jobs in August. Unemployment increased slightly to 3.8% nationally, from 3.5% in July. It’s still considered very low and continues a streak: Unemployment has been 4% or below since December 2021.
While Pennsylvania lagged the country in recovering jobs lost during the onset of the COVID-19 pandemic, the state has seen low unemployment levels this year. In July, the most recent month state data is available, Pennsylvania unemployment was 3.5%, matching the national rate.
Looking at Philadelphia specifically, joblessness is higher than it is statewide, and it has ticked up slightly in recent months. Still, Philadelphia’s numbers show a promising trend.
The 12-month average unemployment rate in Philadelphia, as of July, was 4.9%. It’s the first time that has been below 5% since at least 1990.
The Philadelphia region added 94,000 jobs from July 2022 to July 2023, BLS reported on Wednesday. Philadelphia regional commissioner Alexandra Hall Bovee noted that is a 3.1% increase in local jobs, compared to 2.1% nationally during the same time period.
Of those added jobs, 35,900 were in the city of Philadelphia, which accounts for nearly a third of the region’s employment.
The biggest job gains for the Philadelphia region were in health care and social assistance (adding 28,600 jobs in the year), followed by leisure and hospitality (adding 24,500 jobs). While the U.S. as a whole saw leisure and hospitality jobs up 3.9%, it was up by 8.9% in the Philadelphia region.
Philadelphia’s latest stats mark a milestone for the city, but many other big cities have even lower unemployment.
Of the 10 largest cities in the country, all but New York (5.2%) and Los Angeles (4.9%) had lower 12-month average unemployment rates in July. The lowest average unemployment rates were in Austin (3.1%), Phoenix (3.3%), and San Diego (3.4%).
Wage growth, which has been strong amid the tight job market, remained steady nationally in August at 4.3%.
Until recently, wage growth in the Philadelphia region had lagged the nation, according to BLS’s quarterly reports on employers’ compensation costs by region.
The Philadelphia region had the biggest year-over-year increase in wages and salaries of all 10 metropolitan areas measured in the first quarter of 2023. This happened again in the second quarter, with wages and salaries increasing 6.6% from June 2022 to June 2023, and total compensation costs increasing by 5.8% for employers in the region.