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The keynote speaker at Thursday’s 118th reception said inflation on paper is slowing and real wages are rising. Dr. Russell Mills, the senior regional officer of the Federal Reserve Bank of Cleveland’s Pittsburgh branch, said although consumers may not feel it, wages have largely kept up with inflation.
Inflation-adjusted wages have risen about 24.2 percent, now above the pre-pandemic trend. “When I tell you inflation is slowing, it doesn’t mean prices are going down,” said Mills, a Pittsburgh native who once interned with the Lawrence County commissioners and graduated from Westminster College.
“It simply means the prices are going up less quickly.” Inflation was down in September about 1.3 percentage points from last year, according to the Personal Consumer Expenditures Price Index, which tracks the price of goods and services.
Switching jobs also doesn’t offer as much of a wage boost as it did two years ago. Mills said the employment market is in an unusual place as the gap between the average median wage for job switchers and wage growth for those staying in a job is shrinking. Story continues below video “Employers are a little nervous to let people go because they remember how hard it was to hire just a year or two ago, and employees are nervous to leave because they’re not entirely sure there’s something better out there for them,” Mills said.
Job openings, hiring and quitting are also down since last year. Lawrence County has an unemployment rate of about 3.8 percent, which is down about half a percent, and has recouped about 93.
3 percent of its workforce since the pandemic, Mills said. The national unemployment rate is 4.1 percent.
The Pittsburgh Metropolitan region is recovering from the pandemic slightly slower than other regions but has outperformed most other regions in the last year which the Federal Reserve Bank of Cleveland covers. Mills expects this trend to continue. Mills also outlined the performance of two Pennsylvania industries — steel and natural gas.
Steel production is up six percent in the region while auto production has shrunk 8.2 percent. Both industries have seen declines nationally of 2.
7 and 2 percent, respectively. Natural gas prices are depressed after two warm winters, which has created problems for producers. Mills said producers have become very efficient and need fewer employees but cannot ship their excess natural gas out of the region with low demand.
Overall, manufacturing production has shrunk while service firms have seen growth, according to the Institute for Supply Management index..
