As recently reported in the Tribune Review, the Pittsburgh unemployment rate could be on track to hit record low unemployment of 4.1 percent next year. The article features an interview with Kurt Rankin, an Assistant Vice President and Economist at PNC Financial Services Group who explains the low rate is in part attributed to the “shale gas boom help[ing] Western Pennsylvania recover from the recession sooner than the rest of the nation.” Today we’re going to take a look at the unemployment rate in Pittsburgh, in Pennsylvania and across the nation.
Tracking the Pittsburgh Unemployment Rate
The charts above show the unemployment rate in Pittsburgh’s Allegheny Country and its surrounding counties of Butler, Beaver, Armstrong, Westmoreland, Fayette, and Washington. The steady and consistent drop shows just how much unemployment dropped per month in the last year, from 6.3% to 4.8% even with the flattening in June and July. Much has been said about the amount of jobs and new positions brought to the area thanks to natural gas here. The Pennsylvania Department of Labor and Industry lists the following six “core” areas that make up oil and gas jobs:
- Crude petroleum and natural gas extraction
- Natural gas liquid extraction
- Drilling oil and gas wells
- Support activities for oil and gas operations
- Oil and gas pipeline and related structures
- Pipeline transportation of natural gas
As expected, these core parts of the industry make up a large part of the jobs that helped bring down Pittsburgh unemployment. We’ve seen how the Pittsburgh unemployment rate is currently falling, but let’s take a look at Pennsylvania and the United States to help put things into perspective.
Pennsylvania Unemployment versus The Nation
The above chart, provided by the Bureau of Labor Statistics, shows the impact of the recession on Pennsylvania (shown in blue) and the rest of the country (shown in red). Pennsylvania unemployment rates (and the rest of the U.S.) increased across more than half of the industries: government services, financial activities, information services, manufacturing, construction, trade, transportation, and utilities services all saw unemployment.
However, the mining and logging industry had a 17.54% positive change nation-wise and a 75.36% positive change in Pennsylvania. Since 2012, when the above graph stops tracking, the mining and logging industry has continued to grow. In the following year, Forbes described the “support activities for mining” industry as “not only fast-growing, but strongly profitable.”
Every month, the Pennsylvania Department of Labor and Industry updates their website with information on economic and employment activity in the area and put them in relation to economic and employment activity in the Marcellus Shale. By putting the two into conversation together, the positive relationship between the growth of the Marcellus and growth the area’s economy become apparent. Some of the highlights from the latest report are as follows:
- In the third quarter of 2014, there were 741,900 new hires in all industries
- This resulted in Pennsylvania’s seasonally adjusted unemployment rate for November 2014 to lower to 5.1%
- The average wage in the core oil and gas industries listed above was about $93,000 while the average wage in all other industries was $49,800
- As of June 30th, 2013, 14,800 people are being served by ShaleNET. Over 9,500 of those users have started training activities through the program and over 5,400 participants are completing their training activities and education
- In the third quarter of 2014, there were 2,659 new hires in core Marcellus industries and 13,792 new hires in support industries for oil and gas
- All data and information is from the Pennsylvania Department of Labor & Industry and the North American Industry Classification System
The rest of the December 2014 paper can be downloaded here. It includes charts of the most in demand positions in Pennsylvania, wages for positions in both the core and ancillary industries, and more on the Pennsylvania economy’s relationship to shale.