Pennsylvania sees big drop in unemployment rate in August

Leisure and hospitality — which includes restaurants — grew by just 3,300 jobs in August.

HARRISBURG — Pennsylvania’s unemployment rate took a steep drop in August as the labor force shrank and payrolls shot up again in a continuing rebound from shutdowns and the worst economic effects of the pandemic, according to state figures released Friday.

Pennsylvania’s unemployment rate was 10.3% in August, down 2.2 percentage points from July’s adjusted rate of 12.5%, the state Department of Labor and Industry said.

It had initially estimated July’s rate at 13.7%, among the highest in the nation, but still below the state’s pandemic-driven unemployment high of 16.1% in April, the highest rate in more than four decades of record-keeping.

Ten states reported doubledigit unemployment rates in August, while Pennsylvania still badly lags the national rate, which was 8.4%.

Payrolls had another big rebound in August, gaining back almost 60,000 of the more than 1.1 million jobs lost since mid-March, when the pandemic hit Pennsylvania. With payrolls at nearly 5.6 million, Pennsylvania has regained slightly more than half the jobs lost in the past six months, according to state figures.

In a survey of households, the labor force shrank by 59,000 in August, receding to 6.3 million, well below the record high in February at close to 6.6 million. Unemployment fell by 144,000 while employment grew by 86,000.

At the height of coronavirus-shutdown job losses, seasonally adjusted nonfarm payrolls fell to the lowest level in at least three decades of federal data that goes back to the start of 1990 under the same methodology.

It is still down more than 500,000 from where it was, or about 1 in 12 jobs total, and still behind where payrolls were in 2010, a dramatic drop-off after the state hit a record of more than 6.1 million in February.

Hardest hit has been the leisure and hospitality sector, which shed about 60% of its payroll as restaurants and bars were forced to shut down in-house service and shift food service to takeout or delivery.

Most sectors grew in August, with the trade, transportation and utilities sector adding the most, almost 20,000 jobs, to creep higher above 1 million.

Leisure and hospitality — which includes restaurants — grew by just 3,300 jobs in August, and remains 170,000 jobs — about 30% — behind where payrolls were in February.

Around 3 million Pennsylvanians have sought unemployment benefits since mid-March, including the self-employed, gig workers, freelancers and others who do not typically qualify.

Nationally, 41 states saw their unemployment rates decline in August, according to the federal Bureau of Labor Statistics, as customers returned and businesses reopened under loosened coronavirus restrictions around the country.

Payrolls increased in 40 states, the bureau said.