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Friday, January 30, 2009

PA slowdown worse than U.S. average, Fed data show

Economists and politicians enjoy the notion that metro Philadelphia is insulated from recession because we are so disproportionately dependent on colleges, medical schools, hospitals, healthcare and pharma companies, instead of volatile factory or financial employment.

But eds and meds aren't saving Pennsylvania from the recession. As universities freeze their budgets, drugmakers cut back marketing plans and hospital admission growth slows, the Federal Reserve Bank of Philadelphia's "coincident index" -- a measure combining the size of the workforce, typical hours worked, unemployment, and inflation-adjusted wages and salaries -- has been falling a lot more quickly in Pennsylvania than the national average:

              December 2008       1-Month   3-Month   12-Month
              Coincident Index    Change    Change     Change

Pennsylvania       142.9        -1.5%        -3.4%    -7.2%
New Jersey          158.3        -0.8%        -1.8%    -3.0%
Delaware              149.5        -1.0%        -2.5%    -5.5%

US                         157.8        -0.3%         -0.8%    -0.9%  

 

 That's bad news for the state's growing budget deficit. But Pennsylvania's weakness is a long-term trend: The index is based on the base year 1992, when its value was set at 100. Since then, according to the index, New Jersey job growth and pay has kept pace with the nation, Delaware (with its declining chemical and auto plants) has lagged, and Pennsylvania is far behind.

"Pennsylvania seems to get hit harder during recessions, historically speaking," said Jason Novak, senior economic analyst at the Philadelphia Fed. The state's been in decline, relative to the U.S. as a whole, for decades. Central and Western Pennsylvania are still losing manufacturing jobs, and lately the recession-resistant industries of metro Philadelphia haven't been adding jobs fast enough to offset those losses. "The growth rates for eds and meds have been weakening," down to about 2% a year, instead of 4%," Novak said. "The growth we were seeing in those (sectors) a few years ago, we're not seeing now."
Posted by Joseph N. DiStefano @ 10:42 AM  Permalink | Post a comment
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About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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