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Mekael Teshome and Sarah Mattson

PITTSBURGH, PENNSYLVANIA MSA | MAY 2019

Pittsburgh—Job Market Strengthens

The Pittsburgh metro area’s economy strengthened as employment grew steadily in the first nine months of 2018. The unemployment rate has been
near record-low levels for several months, even as the labor force grew. This shows that the economy added enough jobs to accommodate those
entering the workforce. Two measures of local prosperity, GDP per capita and income per capita, rose in 2017, suggesting businesses and workers
have become more productive. Housing permitting was stable, and home price appreciation, though a bit slower than in 2018, continued at a strong
pace consistent with long-term trends.

METRO AREA SNAPSHOT
Unemployment Rate

Median Home Value

One-year
change

January 2019

February 2019

One-year
change

Credit Card
Delinquency Rate

September
2018

One-year
change

2018:Q4
(percent)

(percentage points)

6.6

0.2

(percentage points)

Pittsburgh

3.8

–1.0

$144,400

5.2

1,118

0.6

Pennsylvania

4.1

–0.5

$173,300

4.8

5,871

0.9

7.3

0.4

United States

4.0

–0.1

$226,300

7.2

146,414

1.6

7.5

0.3

Percent
12
10

— Pittsburgh
— Pennsylvania
— United States

8
6

■ Recession

4
2
0
2009

2011

2013

2015

2017

2019

(thousands)

(percent)

One-year
change

(percent)

The Pittsburgh metro area’s unemployment rate has been near record-low
levels since spring 2018.

(percent)

Payroll Employment

 UNEMPLOYMENT RATE

The Pittsburgh metro area’s unemployment rate has been near record-low
levels since the spring of 2018 and has ranged from 3.8 percent to 4.2 percent
during that time. By comparison, the unemployment rate in the previous two
business cycles briefly reached lows of 4.1 percent (in early 2007) and
4.2 percent (in early 2000). In addition to rising employment, the metro area’s
labor force rose in recent months. A rising labor force is a good sign that job
seekers are confident that if they enter the workforce they will be able to find
employment. It is also a welcome turnaround from the trend of a shrinking
labor force that was seen between early 2016 and mid-2018. The metro area’s
most recent unemployment rate was somewhat above the national level but
was in line with state trends in the latter half of 2018.

Source: Bureau of Labor Statistics/Haver Analytics.

GDP per capita has been growing faster in the Pittsburgh metro area than
in the state and the nation since the Great Recession.
 GROSS DOMESTIC PRODUCT

Index, 2007=100
125
120
— Pittsburgh
— Pennsylvania
— United States

115
110
105

■ Recession

100
95
90
		
2007

2009

2011

2013

2015

Source: Bureau of Economic Analysis/Haver Analytics.

2017

After a year of stagnation in 2016, the Pittsburgh metro area’s inflation-adjusted
GDP per capita shot up nearly 5 percent on a year-over-year basis in 2017. This
growth in the metro area was faster than that in the state (2.0 percent) and the
nation (1.3 percent) in 2017, as it has been since the Great Recession. Although
rising per capita GDP over time usually indicates that the standard of living is
increasing, in Pittsburgh’s case, the statistic is not as optimistic as it seems at first
glance. Total real GDP has grown faster in the metro area than in the state or
nation since 2007, which is a good thing. However, the population in the metro
area has fallen. Because GDP per capita is total GDP divided by population, the
Pittsburgh metro area’s falling population contributes to the growth of the GDP
per capita statistic, making it seem more positive than it actually is.

PITTSBURGH, PENNSYLVANIA MSA

FOURTH DISTRICT METRO MIX
YOUR DISTRICT, YOUR DATA

MAY 2019

EMPLOYMENT AND INDUSTRIAL SECTORS

Since the beginning of 2017, employment in the Pittsburgh metro area has
been growing at an average annual rate of 1.1 percent.

 EMPLOYMENT

Index, 2007:M12=100
108

Since the beginning of 2017, employment in the Pittsburgh metro area
has been growing at a 1.1 percent average annual rate, bucking the trend of
stagnant employment levels that the metro area had seen between 2012 and
2016. The 2017 growth rate is in line with the state’s employment growth and
is moderately slower than the nation’s employment growth. In the five years
from 2012 through 2016, the metro area added only about 5,000 net jobs—an
average annual growth rate of 0.1 percent. In contrast, in the 21 months of data
since 2017, the metro area added more than 20,000 net jobs. Job growth was
somewhat slower in the first nine months of 2018 relative to 2017 (0.7 percent
annualized growth vs. 1.3 percent), but nevertheless, the continuation of a
growth trend is encouraging for the metro area’s near-term prospects.

— Pittsburgh
— Pennsylvania
— United States

104
100

■ Recession

96
92
2008

2010

2012

2014

2016

2018

Source: Bureau of Labor Statistics’ Quarterly Census of Employment and Wages.

More than half of the Pittsburgh metro area’s employment sectors added
jobs in the 12 months that ended with September 2018.

The overall net job gains in the Pittsburgh metro area from September
2017 through September 2018 relied on a few sectors. Education and
health services, financial activities, and construction added jobs during this
period, as they have been consistently doing throughout this economic
expansion. Manufacturing and natural resources and mining (not shown)
added jobs during the period as well. However, professional and business
services and leisure and hospitality, sectors that had been creating
jobs throughout most of this expansion, broke trend and lost workers
on net from September 2017 through September 2018. Additionally,
trade, transportation, and utilities and government continued trending
downward, as they have throughout this expansion.

Education and health services
Construction
Financial activities
Manufacturing
Information
Professional and business
services

— Pittsburgh
— Pennsylvania
— United States

Trade, transportation, and
utilities

 EMPLOYMENT GROWTH BY SECTOR

Government
Leisure and hospitality

		–2

–1

0
1
2
3
Year-over-year percent change

4

5

Source: Bureau of Labor Statistics’ Quarterly Census of Employment and Wages.

As of September 2018, the Pittsburgh metro area’s largest job sector—
education and health services—is also its fastest-growing.
 SECTOR EMPLOYMENT
Employment

12-month
change

Share of
employment

Education and health services

240,759

6,906

21.4

Trade, transportation, and utilities

200,335

–1,233

17.8

Professional and business services

165,847

–664

14.8

Leisure and hospitality

120,573

–1,269

10.7

Government

112,141

–1,177

10.0

Manufacturing

86,788

1,431

7.7

Financial activities

70,680

1,193

6.3

Construction

59,217

1,646

5.3

Information

16,915

95

1.5

Sector

Source: Bureau of Labor Statistics’ Quarterly Census of Employment and Wages.
FEDERAL RESERVE BANK of CLEVELAND

The Pittsburgh metro area added about 7,300 jobs on net from
September 2017 through September 2018. Pittsburgh’s largest sector,
education and health services, is also its fastest growing, and it is driving
much of the metro area’s employment growth. The next four-largest
sectors in the metro area lost jobs on net during this period. Losses in
these larger sectors were partially offset by gains in smaller sectors. Most
of the sectors that contributed substantially to job growth in the metro
area during this period account for a larger share of employment in the
metro area than in the nation. This is especially true of education and
health services, whose share of local employment is 40 percent higher
than in the nation. The sector accounts for more than 1 in 5 jobs in the
metro area compared with about 1 out of 7 jobs in the nation. The one
main exception is manufacturing. While manufacturing began adding
jobs on net in 2017, it still accounts for a smaller percentage of jobs in the
metro area than the sector does in the nation.

PITTSBURGH, PENNSYLVANIA MSA

FOURTH DISTRICT METRO MIX
YOUR DISTRICT, YOUR DATA

MAY 2019

INCOME
After a slow 2016, inflation-adjusted per capita income in the Pittsburgh
metro area grew in 2017.
	I NCOME PER CAPITA

Thousands of dollars
56

	
Inflation-adjusted per capita income in the Pittsburgh metro area

54
52

— Pittsburgh
— Pennsylvania
— United States

50

■ Recession

48
46
2007

2009

2011

2013

2015

resumed growing in 2017 after remaining essentially unchanged in 2016.
Between 2016 and 2017, incomes adjusted for inflation grew 2.1 percent,
or about $1,100 in real purchasing power terms. This is slightly faster than
the metro area’s average annual real income increase during this economic
expansion and is also modestly faster than real income growth in the state
or nation during 2017. Real per capita income in the Pittsburgh metro
area exceeds the state average by about $600 and the national average by
about $2,300.

2017

Source: Bureau of Economic Analysis/Haver Analytics.

CONSUMER FINANCES
Consumer debt levels in the Pittsburgh metro area rose by about
$1,300 during 2018.
	C ONSUMER DEBT

Thousands of dollars, four-quarter moving average
55
50
— Pittsburgh
— Pennsylvania
— United States

45
40
35

■ Recession

30
25
20
2008

2010

2012

2014

2016

2018

Source: Authors’ calculations from the Federal Reserve Bank of New York’s
Consumer Credit Panel/Equifax.

 eal per capita consumer debt levels in the Pittsburgh metro area rose
R
5.2 percent, or about $1,300, during 2018, which is a faster pace than has
been seen in this economic expansion. The majority of this growth was
driven by a notable acceleration in mortgage debt increases. Mortgage debt
was the primary driver of debt growth because homes in the metro area
appreciated at an accelerated pace during 2018, and mortgage debt accounts
for about three-quarters of overall household debt in the metro area. Debt
from auto loans and credit cards both increased about $100 per capita each
during this period, in line with trends of the last few years. The metro area’s
per capita consumer debt is still about $5,000 lower than the state’s per capita
consumer debt and about $14,000 lower than the national average. These
differences can be almost entirely accounted for by differences in average
mortgage debt across these geographies.

As of the fourth quarter of 2018, credit card delinquency rates remain
low and stable in the Pittsburgh metro area.
Percent of credit card balances delinquent, four-quarter moving average
14
12
— Pittsburgh
— Pennsylvania
— United States

10
8
6

■ Recession

4
2
0
2008

2010

2012

2014

2016

2018

	C REDIT CARD DELINQUENCY RATE

The credit card delinquency rate—that is, the percent of credit card
balances that are more than 90 days past due—remains low and
stable in the Pittsburgh metro area. Metro area delinquency rates have
been between 6 percent and 7 percent since 2014; the most recent
rate (fourth quarter of 2018) is 6.6 percent. By contrast, credit card
delinquency rates in the state and nation have been higher than in the
metro area throughout this economic expansion, and neither the state
nor nation currently has a rate below 7 percent. The comparatively low
delinquency rates in the metro area, combined with relatively low per
capita debt levels, suggests that households in the Pittsburgh metro area
are relatively financially stable.

Source: Authors’ calculations from the Federal Reserve Bank of New York’s
Consumer Credit Panel/Equifax.

FEDERAL RESERVE BANK of CLEVELAND

PITTSBURGH, PENNSYLVANIA MSA

FOURTH DISTRICT METRO MIX
YOUR DISTRICT, YOUR DATA

MAY 2019

Home prices in the Pittsburgh metro area rose 5.2 percent from February
2018 through February 2019.
Year-over-year percent change
10
— Pittsburgh
— Pennsylvania
— United States

5
0

■ Recession

–5
–10
2009

2011

2013

2015

2017

2019

HOUSING MARKET
 HOUSING PRICES

Pittsburgh metro area home price appreciation moderated to 5.2 percent
in February 2019 from a peak of 7.6 percent in July 2018. This slower
rate of appreciation is more in line with longer-term trends in the metro
area. To illustrate that 7.6 percent was exceptional for the metro area,
historically, year-over-year growth rates peaked at just under 7 percent
during the national housing bubble in the mid-2000s. Much of the
acceleration in price appreciation in 2018 was driven by rapidly rising
values for the least-expensive third of homes in the metro area. Singlefamily homes remain relatively affordable in the metro area. The average
home value in the metro area is about $145,000, relative to $173,000 in
the state and $226,000 in the nation.

Source: Zillow.com/Haver Analytics.

As of January 2019, the level of residential building permits issued
continues to be stable (but low).
	H OUSING PERMITS

Index, 2007:M12=100, 12-month moving average
110
100

— Pittsburgh
— Pennsylvania
— United States

90
80
70

■ Recession

60
50
40
30
		2009

2011

2013

2015

2017

Residential building permit issuance continued at a stable, albeit low, level.
In the 1980s and 1990s, before the more volatile periods in the housing
market, an average of more than 400 permits were issued per month.
Permit issuance fell sharply in the Pittsburgh metro area during the Great
Recession and again in the middle of this decade, down to an average of
only 143 permits per month from January 2017 through January 2019.
Accelerated population decline in the metro area may be contributing to this
new normal, as the existing housing stock serves fewer residents every year.

2019

Source: US Census Bureau/Haver Analytics.

DEMOGRAPHICS AND EDUCATION
Pittsburgh Metro Area
			
		
2017
Population

Change from
2007

–1.1%

325,719,000

+8.1%

6.1%

–4.0 pp

12.0%

–3.5 pp

Adults with an undergraduate
35.1%
degree or higher

+7.4 pp

32.0%

+4.5 pp

43.3

+1.1

38.1

+1.4

$60,349

+8.5%

$62,221

+0.6%

Adults with less than a
high school diploma

Median age (years)
Median household income

2,333,367

United States

Change from		
2007
2017

Note: Percentage points is abbreviated as pp.
Source: US Census Bureau population estimates, American Community Survey.

 PITTSBURGH, PENNSYLVANIA

		Demographics continue to be one of the Pittsburgh metro area’s greatest

economic challenges. Of the 50 most populous metropolitan areas in the
2010 census (here referred to as large metro areas), the Pittsburgh metro
area saw the steepest decline in population since the 2010 census. This
decline was largely driven by a negative natural change in population; that
is, deaths exceeded births in the metro area by about 24,000. Pittsburgh
is the only large metro area to have had a negative natural change in
population during this period. This is related to the fact that Pittsburgh
has the oldest median population of all large metros areas. In the metro
area, 18.7 percent of residents are older than 65, relative to 14.9 percent
nationally. The unusual age distribution of the metro area’s population
suggests further population decline in the future, a situation which would
limit the region’s economic growth.

Mekael Teshome is vice president and senior regional officer of the Pittsburgh Branch of the Federal Reserve Bank of Cleveland. Sarah Mattson is a research analyst at the Branch. The
authors thank economic analyst Christopher Vecchio for preparing the charts.
All monthly and quarterly figures are seasonally adjusted, and all dollar figures are in constant dollars, for which the base period is provided by the latest available data. Home prices are
an exception, and they are not adjusted for inflation. Where applicable, these adjustments are made prior to calculating percent changes or indexes. Several charts use indexed measures
to facilitate comparisons across regions and have a reference line at 100. These numbers can be thought of as the percentages of prerecession levels. If levels were growing before the
recession, prerecession indexes will be below 100; if levels were falling before the recession, prerecession indexes will be above 100.
The Federal Reserve Bank of Cleveland, including its branch offices in Cincinnati and Pittsburgh, serves the Fourth Federal Reserve District (Ohio, western Pennsylvania, the northern
panhandle of West Virginia, and eastern Kentucky).
Explore more regional analyses like this Metro Mix, along with research, datasets, and the Beige Book, at www.clevelandfed.org/region.

FEDERAL RESERVE BANK of CLEVELAND