Sunday, October 30, 2011

National Economy Grows But PA Economy Reverses

The surprisingly good third quarter national gross domestic product numbers underlined how poorly the Pennsylvania economy is performing.    National GDP rose 2.5% from July to September, the fastest growth rate this year, but Pennsylvania's unemployment rate that had been steadily declining from January 2010 to April 2011 jumps from 7.4% in April to 8.3%  in September.

Pennsylvania is now clearly underperforming a still struggling national economy.  What makes Pennsylvania's recent poor economic performance startling is that Marcellus job growth is real and for about 8 years the Pennsylvania economy did better or as well as the US economy.  But not anymore.

The 2011-12 state budget that brought to Pennsylvania Austerity Economics is proving to be a major economic mistake even in the short run and a bigger blow in the coming years.  That budget destroyed 14,000 jobs in education alone and tens of thousands more in other industries.  It fails to invest in transportation, water and sewer infrastructure, alternative energy  that all are major drivers of job creation. 

Meanwhile at the national level, the 2.5% increase in GDP for July to September was higher than expected and the strongest growth rate this year.  The US economy is now back to its pre-crash size but obviously 3 years later. Yet, the national economy is far from out of danger but at least is growing modestly. 

Unfortunately major policy errors in Pennsylvania have meant that our economy worsens despite national growth and significant Marcellus job creation

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