In the third quarter of 2025, Philadelphia’s labor market continued to soften, with the unemployment rate rising to 5.7%, up from 4.9% in Q2 and notably higher than both Pennsylvania and the United States. The labor force expanded to 788,581, but total employment declined to 743,889, with 44,691 residents unemployed—an increase of over 6,000 from the previous quarter.
Across industry sectors, the picture diverged. Based on an analysis of year-over-year employment changes, sectors such as Education & Health Services and Professional & Business Services have been the primary drivers of job creation in the Philadelphia Metropolitan Statistical Area (MSA). However, month-over-month data indicates some short-term volatility, with the largest employment sector experiencing a slight contraction.
Wage growth in Pennsylvania tells another story. The Mining, Logging, and Constructionsector led the state with a 7.07% year-over-year wage gain to an average of $42.40 an hour. Finance and Insurance also showed solid gains of 4.65%. In contrast, the Information sector experienced a 0.39% wage decline, while Manufacturingwage growth was moderate at 2.82%.
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