Pittsburgh in better shape to weather national recession if it hits, economists say

PITTSBURGH (KDKA) - The Gross Domestic Product, or GDP, dropped for the second quarter in a row, raising concerns that we are heading into a recession.

Money editor Jon Delano takes a closer look at what a recession really is and whether Pittsburgh is likely to experience it.

For the first half of this year, economic growth – as measured by GDP – has dropped a little despite more job growth and consumer spending, says PNC chief economist Gus Faucher.

Delano: "Does that mean we are in a recession?"

Faucher: "I don't think so. By this one measure, the economy is a little bit slower than it was."

Faucher says the official call on whether we are in a recession will come from the National Bureau of Economic Research.  

"They define a recession as 'a significant decline in economic activity that is spread across the economy that lasts for more than a few months,' and I think by that definition we are not in recession. We continue to add jobs," says Faucher.

"Ultimately, it's what's going on with people that matters," says Dr. Antony Davies, a Duquesne University economist.

Davies says if a recession comes, not everyone in Pittsburgh will feel it.

 "If your job is secure, and you feel comfortable and you can make your mortgage, you can buy things you need, then as far as you're concerned, no, we're not in a recession," says Davies.

In a recession, say local experts, people lose jobs, cannot pay their mortgages and other bills and put off spending money on larger items.  But that's not the trend here, at least not yet, because local employers are hiring, not firing.  

"We're seeing modest job growth in the Pittsburgh area, so we've added about three thousand jobs per month over the last three months. The unemployment rate is 4.7 percent. That's actually lower than it was prior to the pandemic," says Faucher.

"There are more jobs today in Pittsburgh than there were 30 days ago, and that's good news for Pittsburghers," adds Davies.

"As of now, businesses continue to hire. Demand for labor is strong, and so I think the Pittsburgh economy is expanding," says Faucher.

So how can you tell if a recession is hitting this region?

"The thing you look for is you've lost your job, your neighbors are losing their jobs, people are putting off buying. Your refrigerator dies, and you're going to get it fixed rather than buy a new one," says Davies.

If our local economy is still growing, does that mean this region can escape a recession if it hits other parts of the country?

"I don't think we can escape it entirely. But because a lot of our employment is in education, a lot of it is in health care, those are less sensitive to the national business cycle. I think we will still suffer with the national recession but probably not as much as would be the case nationally," says Faucher.

"It seems to be the case, at least for the last couple of decades, that the business cycles in Pittsburgh have had their ups and downs, but they've been less extreme than what's been going on elsewhere, and that's good news," notes Davies.

Again, we are not in a national recession yet.  That will be determined later by the National Bureau of Economic Research, not by politicians.

So far at least, Pittsburgh appears to be in better shape than most.