Unemployment rate rises to 7.7% in Lehigh Valley
The Lehigh Valley unemployment rate rose in January, much of it due to routine seasonal adjustments in hiring, but it also signals that economic recovery remains slow for some residents and merchants hit hard by the coronavirus pandemic.
Seasonally adjusted data from the Pennsylvania Department of Labor & Industry released Thursday show the region at 7.7% unemployment, up six-tenths of a percentage point from December. The rate in January 2020, two months before the coronavirus pandemic, stood 3 percentage points lower, or 4.7%.
The state said seasonally adjusted nonfarm jobs in the region increased two-tenths of a percentage point, or by 800, to 362,200 in January.
But over the year, nonfarm jobs were down 5.5%, or about 21,000 in the region, which includes Lehigh, Northampton and Carbon counties, and Warren County, New Jersey. Rates are seasonally adjusted to account for annual spikes, such as holiday hiring.
Out of a seasonally adjusted labor force of 434,000, the state counted 33,300 unemployed, which is about 2,400 fewer people than December, but 58% higher than the January 2020 total of 21,100.
Between last February and April, the region lost 76,700 jobs, said Steven Zellers, a Labor & Industry analyst. Since May through January, the region saw 55,200 recovered, or 72%, far higher than the state’s recovery rate, Zeller said.
But local economist Kamran Afshar said the region is still not out of the woods when it comes to employment, noting how initial unemployment claims between December and February remained much higher than the same months last year.
“[Going from] 7.1% to 7.7% is not a sign of an improving economy,” he said.
The state also said 9 of 10 job sectors saw declines, with the largest being seasonal in nature as cold weather settled in, the holiday shopping and shipping season wound down, and schools and colleges were on winter break.
Leisure and hospitality, which gained 300 jobs, was the only sector to rise, Zellers said. The industry hardest hit during the pandemic saw 7,900 jobs lost since January 2020, the highest total by far among the various industry segments.
While employers — notably in health care and ecommerce — are hiring, layoffs haven’t totally
declined, Afshar said. In his most recent business sentiment index, which he compiles for Afshar’s Data Analytics Center at DeSales University, 21.5% of owners who responded had net job cuts, while 12.5% reported hiring new workers. The survey typically has a sample size of 250 employers.
“No question they are hiring,” Afshar said, “but layoffs are still at a rate that is surprising.”
The overall sentiment index, 50.9, in January rose slightly from the fall report but is far below 64.2 in January 2020, showing, Afshar said in his report, a continued “lack of enthusiasm” among some Valley businesses.
Afshar also said employers expect to add jobs in finance and manufacturing, followed by the accommodation-food and leisure segments, in the next six months.
Looking further, Nancy Dischinat, executive director of the Workforce Board Lehigh Valley, said during a Feb. 23 economic outlook event hosted by Greater Lehigh Valley Chamber of Commerce that the area’s employment is projected to grow by 2028 to more than 365,000. Health care jobs are anticipated to top the list of occupation categories.
That’s provided another pandemic doesn’t hit, she added.