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Lehigh Valley’s Employment Situation Improves, but the Recovery is a ‘Tale of Two Economies’

By Nicole Radzievich Mertz on May 3, 2021

Lehigh Valley’s unemployment rate dropped to 7.1%, according to preliminary data released by the Pennsylvania Department of Labor and Industry. (Graphic/Liz Martin)

Lehigh Valley’s unemployment rate in March dropped to 7.1%, a decrease of nearly a half of a percentage point compared to a month before, new labor data shows.

The unemployment rate among Lehigh and Northampton County residents remains 1.3 percentage points higher than it was March 2020 when the COVID-19 pandemic was declared and sent the economy into a historic downturn, according to preliminary data released April 27 by the Pennsylvania Department of Labor and Industry.

Employers in Lehigh Valley’s larger metropolitan region, which includes Lehigh, Northampton, Carbon and Warren counties, added another 1,100 jobs in March bringing the total employment to 362,400. Lehigh Valley has recovered about three-fourths of the jobs lost at the peak of the downturn.

Lehigh Valley employment is down 4.6% year over year. Pennsylvania employment is down 6.1%.

“The March labor data shows the progress Lehigh Valley’s economy has made during a historically challenging year. The last 12 months has been a tale of two economies. We’re seeing growth in some sectors, but there is still improvement to be made, most notably in hospitality, arts, and entertainment,” said George Lewis, Vice President of Communications, Marketing and Research at Lehigh Valley Economic Development Corporation (LVEDC). “We continue to analyze employment data and other economic indicators to better understand this complex recovery.”

Lehigh Valley began 2020 after posting a record private sector economic output of $43.3 billion – the 65th largest economy in the country – and a low unemployment rate of 4.6%.

Unemployment peaked at 16.6% in April, and employment dropped from 380,000 to 307,000 in one month amid state-mandated business closures and restrictions meant to stem the spread of the virus. Record aid from the federal, state and local governments and community groups poured in to help struggling businesses. Companies adapted new policies and business models in response to the public health crisis.

Not all industries were impacted equally. Those in logistics saw a demand for workers as more people shopped online. Lehigh Valley, located in the heart of the Northeast market, played a central role in that new retail segment of the market. Employment in the transportation and logistics sector is up 10.6% in the metropolitan region from March 2020.

The employment recovery in the hospitality businesses, among the hardest hit by the pandemic, has improved but is still behind other industries. At 29,300 jobs, leisure and hospitality employment is down 16.8% over where it was in March 2020.

At 38,300 jobs in March, employment in manufacturing exceeds the growing logistic sector but is still down about 3% compared to March 2020. A majority of Lehigh Valley’s manufacturing employment fits Pennsylvania’s description of essential work.

While the April unemployment rate will not be out for another month, more timely indicators such as unemployment claims show improvements. The number of initial claims for unemployment compensation in Lehigh and Northampton counties are a fifth of what they were in March 2020, according to state data. In the week ending April 24, 1,429 claims were filed.

The number of online job postings has increased by 8.1% from February to March and 38% since last February, according to the Brookings Institution, a Washington, D.C., think tank that is tracking the recovery. Lehigh Valley ranks No. 41 of 192 metro regions that Brookings tracks regarding annual job posting growth.

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Lehigh ValleyQuick Facts

By the Numbers
$41.2 Billion

2018 Gross Domestic Product

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City Center Lehigh Valley
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10.6% of Labor Force
Employed in Manufacturing

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Lehigh Valley Health Network
By the Numbers
$3.8 Billion

Exports in 2019

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Air Products
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Lehigh Valley Electricians
By the Numbers
$65,119

Median Household Income

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PPL Electric Utilities
By the Numbers
672,907

Population

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Olympus
By the Numbers
358,000

Labor Force

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26.1% of Labor Force
Employed in "Eds & Meds" sectors

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5,073

Technology Patents

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Mack Trucks
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UGI
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Magestic Realty Co
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NFI
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14% of the total community college degrees awarded in PA

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Wells Fargo
By the Numbers
$7.3 Billion

Manufacturing Contribution to GDP

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BB&T
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69th largest metropolitan area in the U.S. by population

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Key Bank
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10,754 degrees awarded by Lehigh Valley colleges (2017-18 academic year)

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St. Lukes University Health Network
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85,000 employed in "Eds & Meds" sectors

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149,000

Population between ages 18 and 34

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