Things to worry about

Is this not one of the biggest threats to Pittsburgh’s economy in years?

Why a local economic story? A lot of this stuff is not leaving here by plane:

If you dig into that export data lots of things pop out.  The value of international exports in “Mining (except oil and gas)” went up over 60% between 2010 and 2011.  That is data for the MSA, which means it does not even capture the prodigious coal being mined in nearby counties like Greene.  Might be worth noting that more recent national data shows more coal exports for 2012 thus far at least when measured in tons, if not value.

Old is new again

So the CP daily blogh points to some recent reporting from PublicSource here in town on the impact of bid rigging in some municipal bonds for local school districts and the Port Authority.  I am unclear what the new news is. Some may recall a few old posts on this here.  August 2011: Monty Hall Meets Public Finance

or these posts on another whole Port Authority financial miasma that almost went a whole lot worse in the end.

Feb 2011: Bad bonds, bad bonds, watcha gonna do


Nov 2008: More Port Authority financial problems?

the bid rigging issue was in the end just a matter of whether borrowers paid a slightly non-competitive price (i.e. rate) for some debt.  A marginal issue by definition.  The variable rate bond issue that nobody ever poked at up front really could have been bad financially.

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Rust Belt Redux

So BLS is reporting that the Pittsburgh regions seasonally adjusted unemployment rate ticked up to 7.4% in September, from 7.3% in August.  It is a curious artifact of the new seasonal adjustment in that the seasonally unadjusted rate for the region was 6.7% in September of 2011, AND September of 2012.

I thought to be fair I should update my rust belt divergence chart of unemployment rates in Pittsburgh, Cleveland and Detroit. See below. I will add in Charlotte gratuitously.  Yes, to give credit where due, Cleveland has been coming in under our unemployment rate the last few months.  Go Cleveburgh!

It is not quite a strict comparison of course.  Pittsburgh looks to again be setting a new record in the size of the regional labor force.

But here is the graph.  Lots of convergence.  What I find surprising is that for 5 months earlier in the year Charlotte’s unemployment rate was higher than Detroit’s.  Just a factoid to chomp on.

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Yunz are cactus now

So this really is a remarkable bit of labor reporting….

The Wall Street Journal has an in depth look at a Pittsburgher who moved to Australia in August in search of well paying employment.   See: American Fills a Jobs Shortage—in the Aussie Outback – An American’s Coveted Gig: Three-Week Shifts at Mining Port in Remote Australia

The story is behind the paywall, but use the Google News back door and search for the article and you should get to read it.

It goes into the story of Charles Stella, a 31-year-old boilermaker from Pittsburgh, who moved to Australia because of the well-paid jobs there.   Note that it appears Mr. Stella was employed when he was here, but the prospect of much better paying employment is what prompted him to move literally around the world.  Migration is indeed just a form of arbitrage.

So it is remarkable in lots of ways.  Here in Pittsburgh our knowledge of all things Australian rarely extends beyond that which Crockodile Dundee might have (mis)taught us.  Remember this old post here: Thought she was cactus.

If you really take the time to read the whole piece, take  note of the very last paragraph.

There was a video produced by the WSJ to go along with the story which is available. Also his abbreviated diary is part of the story package.

Morning over the Alleghenies

No time to parse, but some might want to see the latest promo piece (too long to be advertisement…  certainly not a documentary so I am not sure what to classify it as) from the MSC folks on all things Natural Gas in Pennsylvania.

If I were to  parse a bit I would start with the repeated story I heard in there again that shale gas development is creating some new boom in manufacturing employment in Pennsylvania.  Maybe in the future, but if someone wants to look at the recent trends in manufacturing employment in either Pennsylvania or even just the Pittsburgh MSA I just don’t see how you can say it yet.. It clearly is usually stated in the present perfect continuous. That certainly is how people are taking it and a repeated conversation I will get into will be with folks who believe manufacturing employment in Pennsylvania is not just up, but up a lot in recent years because of shale gas related developments.  Actually if you check the previous links the the manufacturing employment in both Pennsylvania and Pittsburgh took pretty sizable hits just in the September data just out which is a story unto itself and there has not any palpable growth in years.

and Good Morning Wiz.

Counting destiny

Yesterday was a small story that comes out annually on the state of enrollment in the Pittsburgh School District.  PG: City Schools Enrollment Drop Less Than Expected. The story focuses on just a couple numbers being reported by the school district, but it is of course a story based on a whole lot of numbers that don’t get mentioned.

The big mystery seems to be why enrollments of new kindergarten and pre-K students didn’t drop as much as expected.  Here is what we know from the very recent 2010 Census of the population by single year of age living in the city of Pittsburgh.  So children who were age 3 two years aro are now 5 or so and in those pre-K years.

Sure seems to me that the birth years coming into the school system are trending up. Population in the city under age 1 in 2000 (so born between 4/1/2009 and 4/1/2010 techically) is 28% higher than the population born 6 years earlier and still residing in the city.   Now it is not that simple and for school districts there is a lot of inter and intra-regional migration impacting enrollment trends.. something that is surely true for the city’s school system.  It might be that young families are more likely to move out after a child is born which might produce that pattern, yet not produce increasing enrollments by the time the children reach school-age.

So let’s compare to 2000 at least to see if the pattern is really just a repeat.  Here is the same data from both 2000 and 2010.

The 2000 data does not show a decline in population by birth cohort leading into the earliest school age.  So at least superficially there are a couple things to think about.  Looks like right now there are more kids heading into the schools within the city.  Why? If you infer from the 2010 data there are some bigger cohorts coming; those who were age 1 or 2 in 2010 are bigger than the cohorts just older than them.  Lest that be taken a bit too optimisitically for the school district look again at the comparision to 2000 and note that the cohort sizes for every year are far below where they were a decade ago; those under 6 or 7 in 2000 likely are just graduating out of secondary school right around now. All recent age cohorts are smaller than any cohort a decade earlier. So the long run steady state for the school system may still be trending down a bit as these smaller and younger cohorts age through the system.  Still what deserves more thought is just how different the two years look.  The 2000 data actually looks like it had bigger age cohorts as you get older, the opposite pattern of 2010.

But for those who want to look more at trends in City of Pittsburgh demographic trend we compiled that all to death a year ago. The truth is there are a lot of differnet things going on. Different migration patterns for different types of households and and far different trends in different parts of the city as well.  So no one story.

Retroactive record setting unemployment rates

Little noticed in the media, but there was a big change in labor force stats routinely reported on each month for the Pittsburgh region.

A few may remember this post from April when I mentioned that the Bureau of Labor Statistics was reporting seasonally adjusted unemployment rates for the Pittsburgh region that were different from what the state’s own numbers were showing.  Not the biggest of discrepancies so no big deal.  The difference between the two data points was not an error, but an artifact of two different methodologies for adjusting raw labor force data for seasonal variation.

It turns out that with the data just released last week (beginning with the August MSA data) the state has basically given up on using their own models and are now reporting the BLS version of the same regional labor force data for MSAs within the state.  OK, not a problem there.   They also are using the BLS data going back in time to 2000.   Basically all the historical unemployment rate data as reported contemporaneously has been changed.  In some months the differences between the old and new unemployment rates for Pittsburgh can be quite substantial up to as much as 4/10ths of a percent.

But one theme here in recent years is that we have been generally bouncing around or in a few months tying a month in the 1970s which was the last period in which the regional unemployment rate was so far below the nation’s unemployment rate.  The new data actually works out to be a new record (in the past).  In October of 2009 the national unemployment rate was finally reported at 10.0%.  For the Pittsburgh MSA the originally reported final unemployment rate was reported at 8.0% which gives a difference of 2.0 percentage points.   The new unemployment rate being reported for the region that month is 7.7% which gives a difference of 2.3 percentage points below the national unemployment rate.  That would be the largest gap by which Pittsburgh’s unemployment rate below the national unemployment rate in any data since 1970 and likely much further back.

There are actually a slew of contemporanous news stories, punditification, and headlines that all would have to be qualitatively rewritten if the revised data were known at the time. It all gets again to how much we overinterpret these monthly labor force data dumps. Hold that thought because there are some bigger issues in that I may get back to.

With the revision of data back to 2000, the entire time series has been changed.  Here is the updated version of my chart showing the difference between local and national unemployment rates. If you really want to discount what the green means, I don’t have time to update my calculation of the cumulative difference in this chart, but basically these are unprecedented times in some ways for the region’s labor force..  Think all that may have something to do with the record size of the regional labor market and recent net migration flows into the region?  You bet.

Water on Fire

Some may have noticed the emerging marketing theme arguing that Pittsburgh is a place for investment because of…   water. As in H2O.  The veracity of that is a topic unto itself. I always find it curious how the argument can be made when much of the region is subject to what could be a fairly draconian consent decree if there is not a massive new investment in our water infrastructure.  New investment that we have only made minimal preparations for as yet.  We won’t even go into the sorry state of our locks and dams that are vital to our use of much of the local water supply.  It is like the Pirates advertising what great ownership and management they have.  Don’t get me wrong, I think these are big real issues and I have long had on the book wheel on the right a great semi-recent book: The Great Lakes Water Wars by Peter Annin.   But hold all those thoughts.

What water wars are in the news of late?  Up in Milwaukee they also have a fair bit of water as well.  So much water that they also are arguing their water supply is a core part of their regional competitiveness… just like Pittsburgh.  But there is the problem for Milwaukee.  Pittsburgh: friend of foe؟  It turns out Milwaukee is renaming its “Pittsburgh Ave” to “Freshwater Way”.  Really?  You could have paid a consultant to come up with that.  But why did they do it you ask?  Supposedly because they also want to lure water technology firms and “Pittsburgh” did not mesh with their vision of themselves.   OK then.

Here is the thing.   I like Milwaukee.  I have to admit it has been a decade since I’ve been there, but it had a real Pittsburgh ‘feel’ to it when I was there.  A real cross-midwest civic sympatico.  Or so I thought.

Apparently they have been working on this some time and I am not the first to take issue with the whole idea.  What do we do now that they have gone through with it all?  So I say take the high road.  No need for a counterveiling campaign to rename our Milwaukee St.  Maybe we need some confidence building measures to prevent a cross-midwest cold water war.

In a world of unlimited time I would write the book explaining all of our street names.  Why do we have  “Milwaukee St” anyway.  And if anyone has specific history on why Milwaukee has a “Pittsburgh Ave” I would love to hear it.

I need a Spanish translation for ‘Cleveburgh’

Cleveland Plain Dealer today:  Cleveland will declare ‘Bienvenidos’ and try to catch the Hispanic wave

Sort of a Cleveland version of what we read locally recently: PG: Pittsburgh Promise aims to lure Hispanics with financial aid except with more data.  Note the Cleveland PD’s benchmarking of local Hispanic populations. This isn’t a Steeler Nation vs. Dawg Pound world any longer.

I went through my longer thoughts on this at the time..  See this post if you wish: West End Story.  But what I also note if you read the Cleveland PD piece is they now clearly identify a byline of data analysis editor.  Note also I have put a lot of the latest stats on Pittsburgh’s foreign-born population in the latest PEQ.

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Which number do I use?

So here is a labor force story in the news today. Trib:  Job search dropouts abound

The theme there?  The labor force participation rate has been trending down.  Ok.  Hold that thought, but remember that the labor force participation rate is the labor force divided by the working age population variously defined.

Now what do we know the local labor force?  Highest level ever.  Yes, currently the size of the regional labor force is at or near its highest point in history.  As in ever. All time. I tell people this and they just don’t believe me. Most likely because the news all reads the opposite.  Of course it is mostly news reflecting national stats and not what is going on locally.

So what if the labor force participation rate is going down, but the size of Pittsburgh’s labor force is growing rather rapidly then what gives?  One of two things kind of has to be true.  One possibility is that thelocal labor force participation rate is shooting up; which makes that headline today the very opposite of what is the local story.

So I was going to end it there, but there is another story that gets to how we all overinterpret the monthly labor force data.   So the local labor force data just came out the other day and the headline is Pittsburgh’s unemployment rate went up to 7.3%.

Or did it?

7.3% is the number in the press release put out for sure (saved here dated October 1st). Yet compare those numbers to the numbers just posted on the state’s interactive web site which were just updated as well.  What I see (downloaded October 4) is this and it is not 7.3%.

In itself not a big deal really and I suspect some revision did not get into the right file.  So I suspect one of the sources (press release or interactive data) will be updated to eliminate the discrepancy, but still it gets to the core point that the coverage of the monthly preliminary numbers is at least overwrought.     In fact if you look at the JULY 2012 numbers in the states press release and compare it to the interactive data the region’s unemployment rate is different by 0.3%. That actually is kind of a big deal somehow.  Remember there was a news cycle on the first numbers that came out and we pay little attention to any revisions.

So depending on which dataset you look at you can’t definitively say the latest numbers are the all time labor force high.  The important thing is the trend and that is still pretty clear.  Whatever is going on with the latest number the Pittsburgh region is at or bouncing around its all time labor force peak, a story completely overlooked locally.  It is certainly a story different from the nation’s and deserves a lot more treatment than