Revised data shows downward adjustments to Pennsylvania labor market

The Pennsylvania Department of Labor and Industry recently released a report that showed massive downward adjustments to the state's labor market data, leaving the annual average employment for 2013 below the average in 2008.

According to the data, which shows revisions of labor market data from 2009 to 2013, June and July saw the largest downward revisions. Employment estimates for the fourth quarter showed large cuts from original reports, putting fourth quarter employment in 2013 at approximately 8,000 below the fourth quarter of 2012.

Fourth quarter average employment was expected to reach 1.2 million in 2013, but the revised data showed a downward adjustment of more than 13,000.

Despite the revisions, the unemployment rate in the state changed only slightly over the five-year period, aside from the few months with exceptionally large revisions. In both the original and revised reports, the number of unemployed fell sharply in the second half or 2013, while employment also fell.

The Allegheny Institute for Public Policy said the data reflects a "distinct weakening in the labor market.

"Some argue that the falling labor force could reflect retirements. That might be possible but it would suggest that as people with jobs are retiring some of the unemployed are filling the positions opened up by the retirements, including those created by promotions into the vacancies resulting from the retirements. It could happen, but the sudden rather rapid decline in unemployment in the second half of 2013 implies something else is at work, either in measurement issues or in actual changes in labor market dynamics."