PA Consumers Hiked Spending After Recession
Pittsburgh’s quick recovery and growth from the national recession exceeded growth in the rest of the state from 2009-2012, but has now stagnated before reaching pre-recession levels.
First-of-its-kind economic data released Thursday by the U.S. Department Commerce provides a state-by-state look at how consumers responded in the years after the recession officially ended in 2009.
Pennsylvania consumers bought more cars and trucks and boosted their spending in other areas as the nation emerged from recession.
Consumer spending rose about 11 percent in Pennsylvania between 2009 and 2012, about $3,700 per person. According to Kurt Rankin, economist for PNC Financial Services, Pittsburgh’s consumer spending recovered faster than the rest of the state, and continues to grow. Rankin says local consumer spending is calculated by observing job growth in leisure and hospitality.
“The state and Philadelphia has seen about 2.5% year over year growth in leisure and hospitality employment for 2014 through June,” Rankin said. “That number for Pittsburgh though is up over 8%.”
According to the national report, Pennsylvania as a whole slightly exceeded the national average for consumer spending growth. It was in the middle of the pack among the 50 states, placing 25th.
Consumers spent about $16.7 billion on cars, trucks and auto parts in 2012. That's an increase of 24 percent over 2009.
However, Rankin cautioned spending on commodities like cars will not continue to show the same growth in the Pittsburgh region that it did immediately following the recession. According to Rankin, Pittsburghers are already spending everything they reasonably can, and the area needs external investment to recover from the recession fully.
“We need a jolt of faster growth, resulting from of an upturn in national business economic activity… to provide more jobs locally here, buying goods and services across the country that are made here in Pittsburgh to bring the unemployment rate down,” Rankin said.
Rankin also pointed out that unemployment figures are an important factor in economic growth, and in that area, Pittsburgh has flat lined.
“Looking at the numbers through 2012, indeed, Pittsburgh was doing relatively well,” Rankin said. “Unfortunately, at the end of 2012 and throughout 2013, Pittsburgh’s employment was, for all intents and purposes, flat. We saw zero job growth.”
Rankin said a healthy economy in Pittsburgh should have around 4.5% unemployment. In June 2014, the actual number was 5.3%.