Pennsylvania Unemployment Hits Two-Year Low, But Leaves Some Workers Behind
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 its preliminary employment situation for August 2026. Pennsylvania continues to outperform the nation on key labor market indicators. Overall, Pennsylvania added 5,800 jobs from July to August 2026. In the last 12 months, Pennsylvania has added 34,600 jobs.
Pennsylvania’s overall unemployment rate dropped to 3.7%, its lowest point in two years. While the overall employment situation report offers a bounce back from the lackluster gains posted in the last few months, the unemployment rates of Black and Hispanic workers continue to be an issue for long-term economic gains as mentioned in the State of Working Pennsylvania 2026. Pennsylvania jobs reached 6,206,700 in August 2026, up from 6,172,100 in August 2025.
The gains are also uneven across industries. While Pennsylvania continues to outperform the nation in measures like unemployment rate and relative job growth, construction and government employment remained below their employment levels from one year ago. In fact, since August 2025, government, construction, trade transportation and utilities, and the information sector in Pennsylvania have lost a total of 13,900 jobs. As detailed in our recently released State of Working Pennsylvania 2026 report, over the last year job growth in Pennsylvania has been driven primarily by Health and Education and Leisure Hospitality, which account for 36,000 jobs added since August 2025.
These patterns mirror national concerns identified by the Economic Policy Institute, including elevated unemployment among Black and Hispanic workers, long-term unemployment, and slower hiring. Data ending in December 2025 for Pennsylvania also indicates that hiring rates were slowing in the state, supporting the argument that workers are hesitant to seek better employment and have less confidence in the labor market.