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Lehigh Valley’s Unemployment Rate in April Shows Rising Impact of COVID-19

By Nicole Radzievich Mertz on June 2, 2020

The unemployment rate in Lehigh Valley rose to 16.4%, according to preliminary data released by the Pennsylvania Department of Labor and Industry. (Graphic by Liz Martin)

Lehigh Valley’s unemployment rate in April climbed from 5.7% to 16.4%, according to new data that reflect the first full month the business disruptions caused by the COVID-19 pandemic.

The number of unemployed totaled 59,000 of the 359,800-person labor force in Lehigh and Northampton counties, according to preliminary, seasonally adjusted data released Tuesday by the Pennsylvania Department of Labor and Industry. That’s more than double the number of unemployed workers reported by the state in March, and 44,000 more than were unemployed just 12 months ago.

Why it’s important: It is the first full month of local unemployment data that has been released since Gov. Tom Wolf ordered the shutdown of in-person business for non-life-sustaining businesses and issued stay-at-home orders. The statewide unemployment rate in April was 15.1%, according to preliminary estimates.

Historical perspective: This is the first time the monthly unemployment rate in Lehigh Valley hit double digits since June 1983 at 10.2%. It was 15.1% in January 1983. During the last recession, unemployment peaked at 9.3% in the winter of 2010. In recent months before COVD-19, the unemployment rate was relatively low, coming in at 4.6% the first two months of the year. Annually, Lehigh Valley’s unemployment has been below 5% for the last three years.

Nearly 8,000 unemployment claims in Lehigh Valley were in May. (Graphic by Liz Martin)

What’s next: The unemployment rate probably has not peaked. New unemployment claims rose in both Lehigh and Northampton counties for the week ending May 23 by 2,037. The claims have increased in two of the last three weeks after dropping steadily from early April to early May. During May, nearly 8,000 new claims were filed. Meanwhile, Lehigh Valley is scheduled to move into the “yellow phase” Friday, which allows more businesses to slowly reopen.

When experts say employment could begin to rebound: The U.S. Labor Department is scheduled to release its May jobs report Friday, and economists anticipate it will exceed April’s 14.7% rate. Goldman Sachs estimated the rate in May was 21.5%, and the rate may have begun to drop, according to MarketWatch. The Congressional Budget Office, a non-partisan agency that provides economic and budget information to Congress, projects that the unemployment rate nationwide will peak in the Third Quarter at 15.8% and then drop to 11.5% by the end of the year. The CBO predicts the unemployment rate will drop to 8.6% by the end of 2021.

What other economic indicators say: The national Gross Domestic Product, which measures goods and services output, decreased at an annual rate of 5% during the First Quarter, the first decline since 2014, according to revised estimates released by U.S. Department of Commerce’s Bureau of Economic Analysis. Local GDP figures are reported annually. Lehigh Valley had a GDP of $41.2 billion in 2018.

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Lehigh ValleyQuick Facts

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$41.2 Billion

2018 Gross Domestic Product

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10.6% of Labor Force
Employed in Manufacturing

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$3.8 Billion

Exports in 2019

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Air Products
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$65,119

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PPL Electric Utilities
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672,907

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Olympus
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358,000

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Lutron Electronics
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26.1% of Labor Force
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5,073

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

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

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

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85,000 employed in "Eds & Meds" sectors

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149,000

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