Unemployment Rate Drops to 8%, But Not All Sectors Are Recovering Equally

By Nicole Radzievich Mertz on October 27, 2020

Lehigh Valley’s unemployment rate has dropped into the single digits for the first time since the pandemic began but is still nearly double the rate of a year ago, according to new data from the Pennsylvania Department of Labor and Industry.

September’s preliminary, seasonally adjusted unemployment rate for Lehigh and Northampton counties was 8%, a drop of 2.5 percentage points from August’s adjusted rate of 10.5%, according to the data released on Oct. 27. The unemployment rate one year ago was 4.6%

The number of people out of work in Lehigh and Northampton counties fell to 27,900 in September, a decrease of 8,500 and the lowest number of jobless in the region since March 2020. The number of people working or looking for work held steady at 348,300 but reflects a decrease of about 10,000 workers in the labor force since the beginning of 2020.

“The overall trend as reflected in the unemployment rate continues to improve, but we are monitoring other economic indicators and results of research to get a more complete picture of the Lehigh Valley economy,” said George Lewis, Vice President of Communications and Marketing for the Lehigh Valley Economic Development Corporation (LVEDC). “Not all sectors of the economy, categories of jobs, and segments of the labor force are experiencing recovery equally.”

The decrease in the unemployment rate comes as the number of people collecting unemployment insurance has fallen for the tenth straight week in Lehigh Valley and the number of jobs in the region grows, according to LVEDC’s analysis of state data.

In Lehigh Valley’s metropolitan region, which also includes Carbon County and Warren County, N.J., total non-farm employment climbed by 2,400 to 356,900 in September. The region has gained back more than half the jobs lost since the peak of unemployment in April.

The preliminary, seasonally adjusted unemployment rate for the metropolitan area in September was 7.7%, a decrease from 10.4% in August.

The unemployment rate in September fell to 7.9% nationwide and 8.1% in Pennsylvania, according to the preliminary data.

Employers in some sectors of the economy are searching to fill open positions. An analysis by the state’s Labor Department showed hospitals and electronic shopping as advertising for jobs in September at greater numbers than they were in September 2019. And the number of ads for laborers and material movers – a common occupation in the logistics sector – more than doubled in that year over year analysis.

But while certain sectors are hiring, new job losses in other sectors continue in greater numbers than before the pandemic.

Residents in Lehigh Valley filed 4,890 new claims for unemployment insurance in September. That’s 25% fewer new jobless claims than August but nearly 150% more than September 2019, according to the state.

The recession has not impacted all sectors of the economy equally. For the week ending Oct. 10, nearly one-third of Lehigh Valley workers receiving unemployment benefits had worked in either the hospitality sector or in the health care and social services sector, which includes employers ranging from hospitals to day cares.

Also, younger workers made up a large share of the unemployed.

Higher wage jobs are recovering faster from the downtown than lower-wage jobs, according to an analysis by Opportunity Insights, a Harvard-based team of researchers tracking the recovery. In Northampton County, employment rates among workers who make less than $27,000 decreased by 15.1% since January, but employment rates among workers making more than $60,000 decreased only 1.4%. In Lehigh County, the rate among lower wage workers decreased 4.8%, while the rate for higher wage workers increased 6.8% since January, according to Opportunity Insights.

Unemployment rates across the country increased because of the economic challenges brought on by the pandemic. Not all states are recovering from the downturn at the same rate, and some regions are bracing for a possible second wave as the weather turns colder and COVID-19 cases begin to rise again. The unemployment rate for September was lower in 30 states, higher in eight states and steady in 12 states, according to the U.S. Bureau of Labor Statistics.

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