Philadelphia labor market tightens as nation approaches full employment
While Philadelphia has endured poverty and a weak job market for most of its modern history, the labor dynamics of this economic cycle are impacting the city.
January 16, 2019
- While the City of Philadelphia has endured protracted poverty and a persistently weak job market for most of its modern history, the labor dynamics of this economic cycle are having just as much of an impact on the city and region as they are elsewhere in the United States due to prolonged economic growth verging on 10 years. The economy is creating jobs faster than people are entering the workforce.
- Full employment is the condition in which virtually all who are willing and able to work are working. Federal Reserve economists estimate that full employment exists at an unemployment rate of 4.1%-4.7%. Beyond the condition of full employment, inflation begins to accelerate as employers compete to hire workers, pay them more, and inject more dollars into the economy.
- With U.S. unemployment at 3.5% as of the November 2018 U.S. Bureau of Labor Statistics estimates, it is clear that the country has surpassed the level of full employment. Even the City of Philadelphia is not far behind, posting a rate of just 5%. While the Fed is rumored to plan to pause interest rate hikes for the moment, it is unlikely that they will do so in the long term given that the labor market keeps getting tighter.
Source: JLL Research, U.S. Bureau of Labor Statistics