With strong economic growth but a slowing labor market last year, a theme of 2026 will be “waiting for clarity,” according to Federal Reserve Bank of Philadelphia President Anna Paulson, writes Jeff Blumenthal for the Philadelphia Business Journal.
Speaking to the Chamber of Commerce of Greater Philadelphia last week, Paulson said the national economy created about 600,000 jobs, compared to 2 million the previous year.
She noted that nearly 95 percent of private job creation was in the health care and social assistance sector, a good fit for the Philadelphia region, where roughly 27 percent of jobs are in that sector, far above the national 16 percent.
“This means that we have been somewhat insulated from the national slowdown in job creation,” said Paulson.
While consumption grew last year, income growth did not keep pace, pushing the third quarter savings rate down. Low-income households are struggling with high prices and job security concerns.
Paulson said retailers now see headwinds for consumers across income levels, including those with discretionary income.
“For example, although people are still eating out in Philadelphia, contacts tell us that less expensive options on the menu are becoming more popular,” said Paulson.
Read more about how consumers in the Philadelphia region have been impacted by the labor market in the Philadelphia Business Journal.
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