Pittsburgh Economy Fared Well in 2013, PNC Chief Economist Says

Dec 26, 2013

The 2013 economy might have stumbled a bit coming out of the gate, but at least one local economist says it recovered well.

“As the year went on it gathered some momentum,” said PNC Chief Economist Stuart Hoffman.

The year began with “sequestration” which reduced government spending nearly across the board and made several tax law changes including a hike in the payroll tax from 4.2 percent to 6.2 percent, a phase out a some key tax exemptions, an increase to the so-called death tax, and an increase in the top marginal tax rate from 35 percent to 39.6 percent. 

The first quarter of 2013 was sluggish for both the national and the regional economy, but it soon started to change.

“It grew faster in the second (quarter), faster in the third and I think we are ending on a pretty solid note with good retail sales, looks like good holiday spending, some pretty good job growth,” Hoffman said.

The government shut down came along in the third quarter with the threat of a drag on the economy but Hoffman said it turned out to be a “non-event” for the economy.

Locally, Hoffman saw good job growth in southwestern Pennsylvania with strong gains in the energy, mining, technology and financial services sectors that impacted the entire economy. 

“Our housing market improved, personal bankruptcies … as well as business bankruptcies came down and the unemployment rate came down. It’s below the national average,” Hoffman said.

As far as employment is concerned, Pittsburgh was among the first cities in the nation to rebound to 2007 employment levels. 

“Southwest Pennsylvania is on a roll and we expect it is going to keep on rolling,” Hoffman said.

PNC monitors something called “household financial stress,” which is a mix of the unemployment rate, inflation and home prices and the number looked good in 2013.

“Unemployment fell, inflation remained very low, and house prices rose… and we think that was reflected in consumer spending and consumers are paying down debts,” which Hoffman said are all good things for the local economy.

By the numbers: The national unemployment rate in October stood at 7.3 percent, Pennsylvania’s came in at 7.5 percent and Pittsburgh lead the way at 6.7.  The Pittsburgh region entered November with 1.2 million jobs, which is 1.7 percent more than 12 months earlier.