Despite Gas Boom, Pennsylvania's Unemployment Rate Increases Sharply From May 2011 To September 2012

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The data is astonishing.  But it is official United States Bureau of Labor Statistics numbers in the state and regional unemployment section.  www.bls.gov. In terms of unemployment rate trends, Pennsylvania is among the three worst performing states in the nation since May 2011.

Unemployment has jumped in the Commonwealth from 7.4% to 8.2% from May 2011 to September 2012 (the October data will be available in about 2 weeks). During that period, only New York and New Hampshire saw their unemployment rates go up more, and New Hampshire's 5.7% unemployment rate is still below the national unemployment rate.

Pennsylvania is fast becoming a lesson in how state policymakers can fail to maximize the advantages offered by a globally significant energy bonanza and make other policy and budget mistakes that more than offset the twin advantages of the gas boom and declining national unemployment. 

While Pennsylvania's unemployment rate jumps up from 7.4% to 8.2%, the national unemployment rate fell from 9.0% in May 2011 to 7.8% in September, 2012. 

While Pennsylvania's unemployment rate jumps up from May 2011 to September 2012, the unemployment rate falls in 43 other states.

Here's the rest of the ugly economic story.

Pennsylvania's unemployment rate fell from 8.9% in October 2009, when the national unemployment rate hit its double-digit peak, to 7.4% in May 2011.  All through that period, Pennsylvania's unemployment rate was well below the national unemployment rate. But no more.

Pennsylvania's economy is big and needs about 6.5 million jobs for full employment.  And certainly gas is a significant boost and has cut the unemployment rate greatly in some counties.

But given the size of our economy and our 12 million population, gas alone will never make all Pennsylvanians or the whole of Pennsylvania prosperous, even if policymakers maximize its benefits and avoid mistakes that more than offset the benefit of gas.

Most unfortunately, policymakers have made a series of mistakes--massive education cuts being Exhibit A--that have more than offset the benefits of gas that include thousands of jobs and consumer savings of as much as $1,500 per year.  And so, the ugly fact is that unemployment in Pennsylvania since May 2011 has increased substantially, making the Commonwealth the third worst performing state in the nation.

The ugly fact is that Pennsylvania's unemployment during September was higher than the national rate for the first time in a decade and is up from 7.4% to 8.2%, despite the falling national unemployment rate and the gas boom.