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Pittsburgh region unemployment, jobs dip in December

| Tuesday, Feb. 3, 2015, 9:51 a.m.

The region's economy ended 2014 on decent ground as the unemployment rate fell to its lowest level in seven years and retail hiring was strong during the holidays.

The unemployment rate for the seven-county metropolitan area fell to 4.6 percent in December, its lowest level since January 2008, the state Department of Labor & Industry reported Tuesday. The number of nonfarm jobs was down 6,500 from November, largely because of seasonal breaks in construction projects and school employment, but the job count was up by 12,600 from the year before.

Economists remain concerned about a shrinking pool of available workers in Western Pennsylvania but said the report offers some optimism.

“Maybe December is a nice springboard into 2015,” said Frank Gamrat, an economist at the Allegheny Institute for Public Policy.

Low gas prices may have helped Pittsburgh-area retailers, as consumers spent their extra money on restaurants and gifts. Retail employment grew by 2,900 for the month and was 4,100 more than December 2013. Food services also added workers.

The impact of falling gas prices will probably be even stronger for January and February, a time when retailers usually let go of workers who were hired during the holidays. Many stores may opt to retain workers to serve customers who are spending the extra cash saved on gas, said Kurt Rankin, an economist at PNC Financial Services Group.

“December was still a bit early to see that money flowing into the economy because the oil price collapse started on Thanksgiving, and gasoline prices are going to lag a little bit,” Rankin said. “I would still expect retail jobs, in January and February, we won't see the sizable reversal that we usually see because retail workers demand will remain in place from gasoline spending in the first part of the year.”

The December jobs picture in Pittsburgh wasn't all positive. The drop in the unemployment rate was only partly because of people finding jobs. The labor force — the number of people working or looking for work — fell by a seasonally adjusted 500 individuals from November. The decline in the unemployment rate reflects that shrinking pool.

The unemployment rate could level off or even bump higher in the months ahead if more people begin looking for work.

“It's certainly higher than 4.6 percent, because we have untapped labor resources in Pittsburgh,” Rankin said.

Sectors such as professional and business services, which rely on business expansion, were down in December. Professional and business services shed 3,800 workers at the end of the year, many of them administrative positions. Rankin expected the sector to pick up this year.

“My take on the U.S. economy coming into the New Year is that we'll start to see business expansion, not contraction,” he said.

Pittsburgh's unemployment rate remained ahead of the rest of Pennsylvania, where the statewide unemployment rate for December was 4.8 percent. The national unemployment rate is 5.6 percent. The U.S. jobs report for January will be released Friday.

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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