Lancaster County saw the size of its workforce drop during the spring months, according to a recent economic report by EDC Lancaster. It’s the first time, with the exception of the pandemic years, that the county’s workforce shrank ahead of the summer season in more than three decades, according to the report.
The unusual finding comes as other data show a sunnier picture of the county economy. Over the same three-month period, the number of jobs in the county increased by more than 4,000, according to the report.
Rae Ann Miller, manager at the Center for Regional Analysis, a research arm of the EDC, said the numbers from the second quarter, which ended two months ago, reflect a hesitancy among businesses.
Area businesses from different sectors have reported healthy sales, Miller said. Local employers have generally been able to avoid making layoffs as a result, she said.
But as an aging population hits retirement age, EDC staff have heard from business owners who are waiting to hire replacements out of concern that supply costs could jump as global trade adjusts to the Trump administration’s new tariffs.
“A lot of the businesses we talk to, due to that uncertainty, are exercising caution,” Miller said. “So as people are leaving, they’re taking more time to hire people back on.”
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The effect is that the number of people working in Lancaster County is declining by attrition, Miller said. Retirees don’t collect unemployment insurance, so the county’s unemployment rate has stayed low, at 3.6% in June from 3.2% a year prior, according to Miller.
The report showed the number of jobs in Lancaster County increased by 4,200 in the second quarter of 2025, even though the workforce shrank by 614 people.
An increase in jobs coupled with a smaller labor force could mean more people are working multiple jobs, according to Miller. Another possibility is that some people transitioned from self-employed to employed, Miller said.
Parsing the data
The EDC’s report draws on data from the U.S. Bureau of Labor Statistics, which rely on surveys and are subject to change. Tuesday’s revised national jobs report was a reminder of that.
Those new figures showed 911,000 fewer jobs gained across the country between March 2024 and March of this year. Broken down by state, Pennsylvania’s job gains were effectively cut in half from 70,000 to 33,000 in that period, according to the new data.
The revised data at the state level could be a harbinger for Lancaster’s employment numbers, but the BLS data become less accurate when applied to smaller areas, said Matthew Knittel, director of the Pennsylvania Independent Fiscal Office.
But the overall trends identified in the EDC’s report mostly jibe with other indicators, Knittel said. For example, Pennsylvania’s growing share of people reaching retirement age has been a reality for at least the last five years, Knittel said.
Sales tax collections in the last two months have increased 5.5% from the same time last year, Knittel said, a sign that Pennsylvanians are not shying away from purchases.
The fiscal office director said he thinks enough Pennsylvanians are feeling good from gains in the stock market and the still-growing housing market to keep consumer spending at strong levels.
“I think the stock market is giving a lot of tailwind to the economy right now,” he said.
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Migrant labor
The EDC analysis also pointed to the second Trump administration’s efforts to reduce the use of migrant workers.
Construction and farming have historically relied on migrant labor, two important faces of the county’s economy, Miller said.
EDC staff have heard from businesses that are concerned a drop in the size of the undocumented workforce could hurt their production capacity, Miller said, but the EDC did not have hard numbers showing such a change yet.
“It’s definitely a conversation people are having,” Miller said.
According to the Pennsylvania Department of Agriculture, Lancaster County in 2017 had the most people working on farms of any county in the state, with more than 8,000.
The same year, 161 migrant workers utilizing temporary work visa programs were in Lancaster County, much less than in Chester (1,071) and York (234), according to a report from the state agriculture department. The same report did not estimate the number of undocumented farm workers by county, but they made up about 49% of agricultural workers statewide in 2017.
Migrant and undocumented workers are calculated in the BLS jobs data, Knittel said, but they’re not broken down by category. That makes it hard to draw conclusions on how a federal crackdown on immigration is affecting the data, he said.
What to watch
Many of the new tariffs imposed since January have been in place for a while now, but it may not be until the second half of 2025 until businesses have to face them head-on, Miller said.
A lot of businesses, including in Lancaster County, used the time between President Donald Trump’s announcement of tariffs and their taking effect to stock up on imported supplies, both Knittel and Miller said. Thus, it may not be until the latter months of 2025 that businesses run out of tariff-free materials and start to see their production costs go up.
“We’re going to start seeing how those actually affect the input costs for those businesses,” Miller said. “For me, that’s something to watch and pay attention to.”
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