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Pennsylvania Unemployment Hits Three-Year Low, but Job Growth Falters
HARRISBURG – Following this morning’s release of the Pennsylvania August Employment Situation report, Keystone Research Center economist Maisum Murtaza released the following statement:
“This morning, the Pennsylvania Department of Labor and Industry released the preliminary employment situation report for September 2026. The new Pennsylvania numbers present a mixed picture: unemployment rate remains low, but job growth is weakening, and economic gains remain uneven across different groups of workers and industries.
- Job growth weakened in Pennsylvania and nationally. Pennsylvania lost 600 jobs from August to September 2026, while the nation added just. Downward revisions lowered job growth in July and August by twice as much—60,000.
- Pennsylvania’s unemployment rate ticked down to 3.6% in September, while the national rate ticked up to 4.2%.
While overall unemployment rate remains low in Pennsylvania, unemployment rates for Hispanic and Black workers remain far above the low points of the COVID recovery indicating that these demographic groups no longer enjoy the benefits of a tight labor market in the state and nationally.
Over a longer, 12-month, period, job growth in Pennsylvania has been modest but positive, an increase of 45,000. Job gains have been uneven across industries. Construction and government employment remain below their employment levels from one year ago. Since September 2025, government, construction, trade transportation and utilities, and the information sector in Pennsylvania have lost a total of 6,900 jobs.
Education and health care continue to drive our job growth, with 32,600 jobs added since September 2025. Looking forward, Medicare cuts at the federal level in 2027 could hold back health care job growth. One of Pennsylvania’s other main drivers of job growth, leisure and hospitality, lost 8,900 jobs in the past month (from August to September 2026), over and above normal seasonal effects.
The Economic Policy Institute noted similar trends nationally: elevated unemployment levels among Black and Hispanic workers, government employment still being far below its level in January 2025, and reduced hiring in the labor market overall.