Reversing a trend: Midstate unemployment rise outpaces U.S. average

Pennsylvania

HARRISBURG, Pa. (WHTM) — Midstate unemployment rates rose in January, compared to December, by at least a point in all six metropolitan statistical areas (MSAs) of the Midstate, according to new U.S. Bureau of Labor Statistics figures.

As in recent months, the unemployment rates (ranging in January from 5.7 percent in Gettysburg to 7.1 percent in Lebanon) remain higher than their levels a year earlier, before the pandemic began, but lower than their levels early in the pandemic.

What’s new is that the figures are at least a point higher in all Midstate areas than the previous month (December 2020).

And unlike much of the past year, when unemployment was more benign here than elsewhere, Midstate declines were about as bad as Pennsylvania statewide declines, and both the Midstate and commonwealth overall fared significantly worse than in the U.S. overall, where unemployment declined from 6.7 percent in December to 6.3 percent in January. (The national rate, unlike the state and MSA rates, is seasonally adjusted.)

The latest unemployment figures for areas of the Midstate compared to the state and nation:

AreaJan. 2021Dec. 2020 (last month)Jan. 2020 (last year)
Harrisburg-Carlisle6.8%5.8%4.1%
Lancaster6.3%5.2%3.9%
York-Hanover6.7%5.6%4.3%
Lebanon7.1%5.9%4.5%
Gettysburg5.7%4.6%3.8%
Chambersburg-Waynesboro6.5%5.4%4.4%
PENNSYLVANIA8.1%6.9%5.0%
U.S.6.3%6.7%3.6%
Source: U.S. Bureau of Labor Statistics

Midstate unemployment rate increases compared to a year earlier, of between two and three points, remain less than the statewide decline during the same period of 3.1 points and are now similar, on average, to the U.S. average increase of 2.7 points.

What happened in January? The monthly weakness could relate to what — throughout much of the pandemic — has been a relative strength.

“One reason that our area could have been hurt a little worse in January is because of the importance of the warehouse industry, which would have been humming along during the holiday season,” said Stephen Herzenberg, an economist and executive director of the Harrisburg-based Keystone Research Center. “You live by the warehouse industry, you die a little bit in January by the warehouse industry.”

Herzenberg said in his view, the uptick in employment rates — along with the fact that Pennsylvania still has nearly 500,000 fewer jobs than before the pandemic — is evidence that the latest federal stimulus was necessary.

“The worst thing we could do, which the federal government did, to some extent, in 1930 and ’31 and ’32 under President [Herbert] Hoover, is when you get hit by a real shock to the economy and go into a downturn — if government retrenches in that situation when businesses can’t invest and families can’t consume, then you can go into a downward spiral,” which lasted for most of the 1930s.

Congressional Republicans, who almost universally opposed the most recent $1.9 trillion stimulus relief, generally said it was too expensive and not targeted well enough.

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