Philadelphia Employment and Job Growth: 2024 Update
Philadelphia Employment and Job Growth: 2024 Update
Numerous reports describe good news in the national job market, with new jobs in January outpacing the 2023 monthly average [1]. Alongside a steady unemployment rate, under 4% for two years running [2], rising payrolls are indicative of resilient employer demand and bode well for economic growth. In this Leading Indicator, we compare national and local trends in job growth, examining Philadelphia’s employment by sector in greater detail.
What You Need To Know
Comparing National and Local Trends
Despite the recent spike in job growth, economists advise not to give too much credence to a single month’s numbers, as there are often spikes and dips in the data due to random sampling variability and other factors [2]. Rather than focusing on a particular month’s data, they recommend looking at change over time to understand how job growth is trending.
Figure 1 illustrates the 12-month percent change in jobs over the last ten years at the local and national level. The 12-month percent change is a common metric for depicting how jobs are trending over time. In this visual, each data point represents the percent change in quantity of jobs over one year prior. For example, the striking dip in April 2020 for Philadelphia jobs indicates that there were 15% fewer jobs in April 2020 than in April 2019 and nearly 9% more jobs in April 2021 than in April 2020.
Looking at the graph over time, one clear takeaway is that jobs tend to trend upwards, with a consistent positive growth from April 2014 to March 2020 and from April 2021 to today. Job growth in Philadelphia closely mirrors national job growth, albeit with more variability shown in the jagged nature of the blue line.
Since mid-2021, job growth over 2020 has been high, yet the rate of growth has been declining. In Philadelphia, the number of jobs in December 2021 was 9% greater than the number of jobs in December 2020. As of December 2023, there are only 2.5% more jobs than in December 2022. The dramatic year-over-year growth of 2021 reflects the economy’s recovery from the worst of pandemic-related job loss. The relative decline in growth in 2022 and 2023 shows that while the economy is still trending upwards, the annual percent increase in jobs is lower. However, the average annual percent growth in 2022 and 2023 is still higher than average annual growth in years preceding the pandemic
Figure 1:
Source: Bureau of Labor Statistics
Philadelphia Job Growth
In Philadelphia, the effects of the pandemic in job losses and the post-pandemic recovery and job growth vary significantly across sectors. Figure 2 illustrates the number of jobs provided by each sector over the last ten years. There are several notable tends.
First, jobs decreased in all sectors from March 2020 to April 2020, marking the beginning of the pandemic. Jobs in Leisure and Hospitality saw the largest decrease, falling by 60% over the one-month period, while some sectors saw comparatively little loss. Jobs in Education and Health Services and in Information fell by 7%, while jobs in Financial Activities and in Government fell by only 4%.
Over the last ten years, Education and Health Services has consistently provided twice as many jobs as the next highest provider, speaking to the strong impact of anchor institutions in Philadelphia. While the Government sector was the second highest sources of jobs from 2013-2019, the Professional and Business Services sector is the second highest today.
Figure 2:
Source: Bureau of Labor Statistics
Takeaways
Using annual change in jobs as a metric of economic recovery, the data indicate a promising trend of upward growth. The slowing pace of job growth since 2021 merely reflects diminishing returns after the initial post-pandemic recovery as well as a return to the usual pre-pandemic pace of changes in employment.
Although Philadelphia’s overall job growth mirrors the national-level growth, the city’s private sector job growth lags behind other cities, as Philadelphia’s job economy is largely driven by Education and Health Services. Of the city’s twenty largest employers, only four are for-profit companies, while the rest are educational and medical institutions or nonprofit organizations [3]. While this may result in comparatively lower profits generated, the city benefits from the stability of jobs in Government and Education and Health Services sectors.