PA lagging behind National Average for Economic Growth

The latest economic data show the continuation of a trend for Pennsylvania: declining but higher-than-average unemployment and higher prices than a year ago due to inflation.

new report from the Commonwealth Foundation notes how Pennsylvania lags behind the national average.

A sluggish recovery

“Pennsylvania’s economy remains sluggish in its recovery, with fewer jobs and fewer individuals in the labor force compared with prepandemic levels,” the report noted. “Pennsylvania has the 8th highest unemployment rate in the nation, and more than 93,000 individuals have dropped out of the labor force entirely.”

More than 108,000 payroll jobs have disappeared since February 2020, while 20 states have fully recovered from pandemic-era job loses.

“The gist of the report,” said Commonwealth Foundation Vice President Nathan Benefield, “is don’t oversell the good news because – a lot of people focusing on the unemployment rate itself, it doesn’t quite fully measure the state’s economy.”

The latest numbers continue the trend in recent months where Pennsylvania is improving, but not as quickly as other states, and still lags behind the prepandemic status quo.

PA Outpacing Some Border States

While the national unemployment rate is 3.7%, Pennsylvania’s rate is 4.2% as of August. That beats some border states like Maryland, New York and Delaware, but when Americans look for work, they also look nationally. Far-flung states with strong economies, like Florida and North Carolina, continue to lure workers. That competition makes it hard for Pennsylvania to stand out and grow its population.

The commonwealth can’t control some issues, like inflation, but policymakers do have some latitude to affect the economy, Benefield said.

National inflation not helping growth

“What has driven up inflation is government spending of money, putting more money into the wrong places that’s driving more money chasing fewer goods,” he said. “Controlling government spending and not trying to ‘stimulate’ the economy with spending is step one.”

Benefield recommended regulatory reforms to remove economic burdens. “That’s a big opportunity that Pennsylvania lawmakers need to look at,” he said.

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