PA Capitol Digest Blog

On March 8, the Department of Labor and Industry announced Pennsylvania's unemployment rate was down one-tenth of a percentage point from December to 4.1 percent. The rate declined by one-half of a percentage point from January 2018.

The national rate rose one-tenth of a percentage point to 4.0 percent.

The estimated number of Pennsylvania residents working or looking for work, known as the civilian labor force, was up 10,000 over the month. The number of employed Pennsylvanians rose by 14,000 to a record high of 6,194,000.

The number of unemployed residents was down 5,000 from December to its lowest level since it was matched in April 2007. Unemployment has not been lower since December 2000.

The estimated number of jobs in Pennsylvania, referred to as total nonfarm jobs, was down 500 from December's record high to 6,030,200 in January. Highlights from this month's jobs report include:

Total nonfarm jobs increased from December in six of the 11 industry supersectors.

The largest movement was a decline in education & health services, down from a record high.

Leisure & hospitality jobs rose to a record high level.

Over the past 12 months, jobs increased 0.8 percent in the commonwealth with gains in seven of the 11 supersectors. Education & health services had the largest volume 12-month gain. Nationally, jobs were up 1.9 percent during this timeframe.

On March 6, State Treasurer Joe Torsella announced the authorization of an $800 million line of credit from Treasury’s Short Term Investment Pool (STIP) to the General Fund, expiring within 23 days, to ensure adequate liquidity in the General Fund and the ability of the Commonwealth to meet its expenditure needs.

The Treasurer and Auditor General both signed off on the line of credit. An initial draw of $650 million on the line of credit was made on Thursday.

“This line of credit represents a normal and short-term cash flow need related to typical seasonal patterns in revenue collection, and is the only short-term borrowing expected in this fiscal year,” said Torsella..

“Looking ahead to next fiscal year, however, I am concerned about the projected level of the General Fund,” warned Torsella. “As the General Assembly considers next fiscal year’s budget, these projections underscore the need to align revenues with expenses responsibly, and avoid the use of one-time measures.

“If next fiscal year’s anticipated low starting balance in the General Fund is realized, the Commonwealth will likely encounter liquidity demands as early as September, necessitating additional short-term borrowing by the General Fund,” Torsella explained. “The Commonwealth needs a structurally balanced budget, and a focus on rebuilding reserves, such as the Rainy Day Fund, that may be needed to weather future storms.

The General Fund balance started Fiscal Year 2018-19 at $3,141,346,608. Current projections show that the General Fund balance will drop to $2,180,309,238 to close out the current Fiscal Year and begin the next one; a reduction of $961,037,370.

While projections may change, if realized this would be a ten-year historical low in the ending/opening balance of the General Fund.

“Treasury will continue to provide short-term liquidity to the General Fund when appropriate and consistent with our investing guidelines.”

The line of credit is set to a variable interest rate equal to the Securities Industry Financial Markets Association (SIFMA) 7-day Municipal Swap Rate. The current SIFMA Municipal Swap Rate is 1.75 percent.

March 9, 2019

Saturday PA Capitol Digest NewsClips

March 8, 2019

PA Unemployment Rate Down To 4.1 Percent In January, Down Slightly From December

Friday PA Capitol Digest NewsClips

March 7, 2019

Thursday PA Capitol Digest NewsClips

March 6, 2019

State Treasurer Authorizes $800 Million Line Of Credit For State General Fund; Warns About Low Fund Levels

Wednesday PA Capitol Digest NewsClips