Most Recent Monthly Values
The rate of growth in the GPR’s economy trended downward through the first half of 2011 as shown by the monthly values of the GPCI, until they began to move strongly up in August.   Following declines in November and December, the index rose again in January; suggesting that the recovery in the US economy is starting to take hold here. As noted above, since late in 2010 the y/y growth rates in total and private sector employment in the Philadelphia and Trenton MSAs have been below the comparable US figures. The overall moderate employment growth has been due to low rates of hiring in the Professional and Business Services and Leisure and Hospitality Services sectors; and continuing job losses in Financial Activities in Information.  Employment in the Construction sector has rebounded strongly over the last year, especially in the suburbs. 

The seasonally adjusted (SA) unemployment rate in the two MSAs in January 2012 was 8.3%, the same as the US figure. Consistent with the slowing employment growth rate, the difference between the GPR and the US unemployment rates disappeared over the last year. Since the start of the recession, the unemployment rate in the two MSAs had been consistently about 0.5 percentage points less than the US rate.

As noted in our recent releases of the GPLI and the GPCI, Select and IHS Global Insight concluded that the GPR’s economy began to recover in March 2010, about nine months after the US economy.  One explanation for the difference in the turning points is that the GPR’s economy didn’t start slowing until well after the US economy turned down, and has since trailed it coming out of the Great Recession. The gradual rate of economic recovery means, according to IHS Global Insight’s most recent economic forecasts, that the region’s total non-farm employment will not return to its pre-recession peak until the second half of 2013 at the earliest.

Trends During the Last 12 Months 
In order accurately interpret the most recent m/m movement in the GPCI; it is helpful to also look at the trend in the 12-month moving average. An occasional month of downward movement in the value of the GPCI does not indicate a recession or even deteriorating economic conditions, nor does an occasional month of upward movement suggest that economic conditions are improving. When the GPCI has been consistently above its moving average, the economy is currently expanding; when it has been consistently below its 12-month moving average, the economy is experiencing a downturn. The monthly values of the GPCI were consistently above the 12-month moving average during first half of 2011, but have been mostly below it since then. The flattening of the 12-month moving average line shown above is consistent with the moderate employment growth in the region over the last year. The fact that the monthly values of the GPCI have been above the trend line during three of the last four months suggests that the slope of the 12-month moving average line should begin to increase if recent trends hold.