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W.Pa. unemployment rate at nearly 8-year low

| Tuesday, Feb. 2, 2016, 9:27 a.m.
Kevin Legler, a Sheetz employee for three months, tends to a customer at the West View location, Tuesday, Feb. 2, 2016.
Philip G. Pavely | Tribune-Review
Kevin Legler, a Sheetz employee for three months, tends to a customer at the West View location, Tuesday, Feb. 2, 2016.

Pittsburgh-area employers scaled back hiring in December and highlighted what economists said was a bumpy expansion in the job market despite annual growth that is among the strongest in 15 years.

The seven-county region lost 2,600 nonfarm jobs during the month, largely because of seasonal cuts in construction trades, the Pennsylvania Department of Labor and Industry reported Tuesday.

The jobs report offered a mixed picture, one in which employers reported shrinking payrolls even as a separate survey of households showed more people were getting hired. The unemployment rate, which is based on the household survey, dropped to to 4.8 percent, its lowest point since May 2008.

The overall picture of the economy was “scattershot,” said Kurt Rankin, an economist at PNC Financial Services Group. Service sector employers, such as retail and entertainment venues, have had the strongest gains, while goods-producing industries have struggled, a scenario that is unlikely to change given slowing growth prospects nationally in 2016, he said.

“If businesses are doing well in this environment, they should continue to do well,” Rankin said. “But businesses that are looking for new demand are not going to find a surprise in the new year.”

The biggest losses came in construction, which cut 4,000 jobs in December. Some seasonal pullback in construction is expected with the onset of winter, but the sector also is down 1,200 from December 2014.

Local colleges and universities pulled back hiring, down 900 jobs in December and 2,100 from a year earlier, which economist Frank Gamrat attributed to uncertainty over the state budget.

“The budget still has not been finalized,” said Gamrat, of the Allegheny Institute for Public Policy. “I think that gets to your colleges and universities. The state schools still haven't been paid yet.”

Plummeting oil and gas prices have strained the region's natural gas companies and manufacturers, particularly steel makers that produce products for gas drillers. The mining and logging sector was flat in December, and manufacturers lost 300 jobs.

Falling gas prices should give consumers more money to spend, and there are signs that consumers are feeling confident. Retailers expanded more than any other sector in December, adding 2,300 workers during the holiday shopping season. Leisure and hospitality was essentially flat from the month before, adding just 100 jobs, but have grown by 7,700 employees from December 2014.

Sheetz was among the retailers that did more hiring last month. The Altoona-based convenience store chain added 805 employees amid a wider expansion. It recently raised wages companywide to compete for talent.

Pittsburgh's unemployment rate for December is on par with the state and below the national rate of 5 percent. The U.S. jobs report for January is scheduled to be released on Friday.

Chris Fleisher is a Tribune-Review staff writer. Reach him at 412-320-7854 or cfleisher@tribweb.com.

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