A strong money supply and a spike in the hours worked by factory employees have helped the Erie-region economy avoid a dreaded “double-dip” recession, said Jim Kurre, director of the Economic Research Institute of Erie and an associate professor of economics at Penn State Erie, The Behrend College.
His Erie Leading Index, a quarterly snapshot of the region’s economy, shows growth in six of eight key economic indicators, including construction permits, the U.S. interest rate spread and the S&P 500. The index hit a record high in May and matched it in June, leading Kurre to believe that another recession is not likely in the next six months.
“Although the economy is not recovering as fast as we might like, the tornado siren is not sounding for an upcoming downturn, and that’s good news,” he said.
Total employment in Erie increased in March, May and June. The number of manufacturing jobs fell slightly, however, after holding level for the past year. Planned cuts at GE Transportation – the largest employer in Erie County – could knock those figures even lower.
“The job cuts at GE’s Erie plant may spill over to GE’s suppliers,” Kurre said. “Those layoffs will put downward pressure on the local economy.”
Pennsylvania factory workers already are feeling a different kind of pressure: They’re working longer weeks, according to the Erie Leading Index. The current average – 40.99 hours – is the second-highest rate in five years. That’s a good sign, Kurre said; increases in work hours tend to foreshadow increases in employment.