Employers cut payrolls in region by 4,700 jobs in August, state says

| Tuesday, Oct. 1, 2013, 11:42 a.m.

Employers in the Pittsburgh region cut payrolls by 4,700 jobs in August and the unemployment rate rose slightly, ending six months of declines, the state said on Tuesday.

The figures underscore concerns by economists that the recovery in the job market remains anemic.

“There's not any redeeming quality in this report,” said Kurt Rankin, an economist at PNC Financial Services Group in Pittsburgh.

Construction was the only major sector that continued to show strength, but it didn't offset declines elsewhere, he said.

The jobless rate in the seven-county region rose 0.10 of a percentage point to 6.8 percent, according to a survey of households by the state Department of Labor and Industry. The figures are seasonally adjusted.

In August, the statewide jobless rate rose 0.20 to 7.7 percent compared with a 0.10 decline in the national rate to 7.3 percent.

In the Pittsburgh region, construction and associated specialty trades added 2,000 jobs in August. Rankin said those jobs are higher paying, and an improvement in that sector “suggests that Pittsburgh will continue to build — you see it Downtown and on the highways — and projects will continue over the next 12 to 18 months.”

But the region lost jobs in education and health services, which fell by 1,400 jobs, along with seasonal declines in health care and social assistance, down 600 jobs. The leisure and hospitality sector declined to 120,700 in August, down 1,900 from the previous month and the first drop for the tourist industry since February, the state report said. Local government jobs dropped by 1,000, evenly split between educational and noneducational services. Payroll jobs, not seasonally adjusted, are determined by a separate survey of employers.

One month up or down is not a concern, Rankin said, and it's not unusual for the region to experience late-summer employment declines.

Last year, August was the low point, then jobs increased as the year closed.

“I don't think the Pittsburgh economy has weakened to the point of undoing the recent trend in job gains. I'd have to see weakness in another report or two to see that,” Rankin said.

Rankin said the effect on the economy of Tuesday's federal government shutdown will be minimal.

He foresees that “government workers will receive back pay, so essentially it's a paid vacation.”

As a result, their incomes will not disappear from the economy, even if the shutdown lasts for a week or two.

That's unlike the damage to the economy caused this year by spending cuts, known as the sequester, and increases in payroll taxes passed by Congress, both of which reduced economic activity.

Back pay for shutdown days would require an act of Congress. Workers were compensated for the last federal shutdown in 1995 and 1996.

The region consists of Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties.

Butler County had the lowest jobless rate at 6.5 percent, while Armstrong County had the highest at 8.6 percent.

Unemployment rates in Pennsylvania's 67 counties ranged from 5.8 percent in Montour County to 11.3 percent in Cameron County.

John D. Oravecz is a staff writer for Trib Total Media. He can be reached at 412-320-7882 or joravecz@tribweb.com.

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