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State jobless rate slips as more people leave workforce

| Friday, June 20, 2014, 10:12 a.m.

Employment in Pennsylvania reached the highest level in almost six years last month as companies picked up the pace of hiring.

But even with the addition of 24,700 nonfarm jobs in May and a drop in the unemployment rate by a tenth of a percentage point to 5.6 percent, the lowest level since September 2008, economists were less than sanguine about Pennsylvania's recovery.

“It's better than it has been,” said Frank Gamrat, an economist with the Allegheny Institute for Public Policy in Castle Shannon.

Long-term job growth in Pennsylvania has been among the weakest in the nation, according to the Keystone Research Center in Harrisburg. After factoring in Friday's figures, the state ranked 33rd in the past 12 months and 48th since 2011, said Natalie Sabadish, a Keystone analyst.

Construction companies, business services, schools, health care and the leisure and hospitality sectors led the gains as statewide jobs climbed to 5.79 million in May, the highest since September 2008 and a 1.1 percent increase from a year ago, the state Department of Labor & Industry reported.

The unemployment rate was well below the national rate of 6.3 percent. But the rate decreased, in part, because of a shrinking workforce and not because more people were finding jobs. About 12,000 Pennsylvanians dropped out of the workforce. People who have stopped looking for work are not counted as unemployed, and this can artificially lower the unemployment rate.

“There's still a lot of uncertainty out there in the minds of the citizens, and that starts to bleed into the economy,” Gamrat said.

Still, job growth in May continued the positive momentum from April, in which revised figures showed that companies added 12,300 jobs.

Hotels, restaurants and recreation businesses have been a bright spot in the past year, adding 6,800 jobs in May and 20,100 from a year ago. While some workers may be discouraged, many Pennsylvanians seem to be feeling positive enough to go out and spend money on recreation, Gamrat said.

“Leisure and hospitality has been strong, regionally as well as statewide,” Gamrat said. “I think there's maybe some optimism in that area.”

Though private sector job growth has picked up this year, government employers have cut staff amid state budget cuts, especially in education. Public-sector jobs have declined 6.2 percent since January 2010, Sabadish said.

“Public sector jobs have fallen a lot since the recession and so have manufacturing jobs, and that puts us at a pretty low ranking,” Sabadish said.

Chris Fleisher is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or cfleisher@tribweb.com.

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