As job market cools, workforce development in emerging industries gains urgency
September 2025 — Philadelphia’s job market, once a post-pandemic high performer, is showing new cracks as unemployment edges higher and hiring slows. Job searches are lengthening as employers hesitate, and policymakers are watching closely as the slowdown ripples from businesses into households across the city.
Pennsylvania’s unemployment rate reached 4% in July, up from 3.6% a year earlier. The Philadelphia–Camden–Wilmington metro came in slightly higher at 4.2%. In Philadelphia County, the rise has been sharper: unemployment jumped from 4.9% in May to 5.7% in July, topping both state and national averages. For households on tight budgets, those percentages translate to lost health insurance, late rent, and growing housing stress.
Nearly six in 10 Philadelphia households reported struggling to pay their monthly bills, and 13% said they lacked access to stable housing at some point over the past six months.
National forces are shaping Philadelphia’s slowdown. U.S. job growth has cooled to its weakest pace since 2010, outside of the pandemic, as companies rein in spending.
“Over the last three years, fewer companies have been reporting intentions to expand payroll,” said Roc Armenter, executive vice president at the Federal Reserve Bank of Philadelphia, as cited by Technical.ly. “Each year, even fewer report actually bringing in new employees.”
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Workers are also acting differently. Analysts note the rise of “job hugging” — employees holding onto current positions out of fear that a move could leave them worse off. That dynamic means fewer openings and stiffer competition for new graduates. Philadelphia ranks 40th out of 55 metros for new graduate opportunity, with a hiring rate of just 2.2%.
Still, there are bright spots. Philadelphia is carving out a role in artificial intelligence and technology, ranking No. 11 nationally in AI-related job postings earlier this year, with 378 openings — more than 2% of all postings among the top 75 metros.
Tourism is also adding to the momentum. “We believe that there will be a $1.3 billion net impact in the region, in addition to what normally comes in through tourism,” said Angela Val, president and CEO of Visit Philadelphia. “Just the World Cup is expected to bring in $770 million and create over 6,000 jobs.”
Regionwide, employment is holding up better than headline unemployment suggests. The metro area added 7,200 nonfarm jobs in July, pushing total employment to a record 3.15 million. Annual job growth has held steady at 1.6%, on par with statewide trends.
What emerges is a labor market in transition. White-collar workers and graduates face headwinds from cutbacks while new industries show resilience. Workforce programs will be critical to bridging the gap, and local universities are already stepping up.
“Data science and AI are embedded in nearly every discipline. The depth of knowledge required varies, but students must be prepared,” Gary Liguori, chancellor of Penn State Abington, told Invest:. “That is why we emphasize internships, faculty-led research, and experiential learning to build a portfolio that prepares students to step confidently into their careers.”
Other institutions are taking similar steps. “One of our main goals is staying ahead of AI and revamping the curriculum accordingly,” said Joseph DiAngelo, dean of the Haub School of Business at Saint Joseph’s University. “We need to prepare students for jobs that don’t yet exist, equipping them with critical thinking and foundational skills in technology, science, math, and business so they can continue learning throughout their lives.”
At Alvernia University, President Glynis Fitzgerald framed it as a balance: “We’re intentional about aligning training with the latest technologies in students’ target fields. It’s a balance of foundational learning and cutting-edge technology that ensures students are ready for both immediate employment and lifelong adaptability.”
For more information, please visit:
https://www.philadelphiafed.org
https://www.bls.gov
https://www.visitphilly.com/
https://www.unitedforalice.org
