Report shows Pennsylvania has a healthy economy, workforce

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Pennsylvania has a healthy workforce. 

That’s the finding of the Annual Labor Market Update put out by the Pennsylvania Workforce Development Association. 

The association on Thursday released a full-year review of the state’s labor market and other economic indicators, which showed that while Pennsylvania’s economy is healthy, the labor market is rebalancing to favor employers, and key demographic groups are facing workforce challenges.  

The Association said that workforce development can help ensure that workers have the skills to fill available jobs and advance in their careers, breaking the cycle of wage stagnation.  

“Pennsylvania’s economy is healthy, but underlying factors make it clear that our policymakers must invest in workforce development,” said Carrie Amann, executive director of the Pennsylvania Workforce Development Association. “Our research shows a high share of prime-age men without jobs, one in seven in Pennsylvania. Additionally, workers without a college degree have experienced long-term wage stagnation.” 

She said that these populations are likely to benefit from robust workforce development services. 

“If we focus on workforce development, Pennsylvania can build on its healthy economy and ensure that all Pennsylvanians can build strong, thriving careers in our commonwealth,” Amann said. 

According to prior reports, Pennsylvania’s economy has the tightest labor market on record in recent years.  

The number of jobs in Pennsylvania increased steadily, providing employment for most Pennsylvania workers seeking a job.  

The most recent months of data reveal a labor market rebalancing. Pennsylvania no longer has substantially more job openings than unemployed workers.  

As a result, quit rates, a symptom of individual worker leverage, have dipped.  

The data also shows that, even in the tighter labor market of 2023 and 2024, Pennsylvania made limited progress on some long-term labor market challenges, such as wage stagnation and large-scale joblessness among prime-age men — 25-54 years old. 

In December 2024, the latest data available, Pennsylvania had 139,600 more jobs than in January 2020, the peak employment before the pandemic.  

The state’s job growth remained steady throughout 2024 and exceeded U.S. job growth in the year’s second half.  

The association noted that Pennsylvania job growth is usually only half of U.S. job growth. 

The Pennsylvania unemployment rate equaled 3.6% in December 2024. Before mid-2022, the unemployment rate in Pennsylvania never dropped below 4%, going back to January 1976 when the current state unemployment rate data series began.  

In the 30 months since July 2022, Pennsylvania’s unemployment rate has been at or below 4%. 

Unemployment rates remain lower in every county and every Local Workforce Development Area (LWDA) than before the pandemic, with the largest drop in unemployment in the western half of Pennsylvania. 

In November 2024, the ratio of unemployed workers to job openings climbed back to one-to-one, giving workers less choice of jobs and employers more choice of workers. 

Quit rates in Pennsylvania declined in recent months to 1.7%, down from a peak of 2.8% in May 2022. The association said that this suggests that workers have declining confidence in their ability to find an equivalent or better job if they quit. 

While inflation-adjusted wages grew 5% to 10% from 2019-2023 in the bottom half of the earnings distribution, data shows that average weekly wages grew less from 2019 to 2024.  

The association said the main reason is the high rate of inflation in 2021 and 2022. 

In 2023 about 361,000 prime-age Pennsylvania men did not have jobs, an improvement from approximately 390,000 in 2019.  

Eight of the 22 Workforce Development Areas have a prime-age employment rate of less than 80% – meaning that more than two of every 10 prime-age men are not employed. 

One factor contributing to limited progress on prime-age male employment is that Pennsylvania manufacturing and construction employment levels are still 1.6% below their pre-pandemic levels, the association said.  

Low blue-collar job growth highlights the importance of maintaining policies that grow public and private investment in manufacturing and construction.