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Pennsylvania jobless rate drops below 7 percent for first time in 5 years

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Friday, Jan. 24, 2014, 10:36 a.m.
 

The state's unemployment rate in December dropped below 7 percent for the first time in nearly five years, a state labor market report released Friday showed, but the seemingly positive result masked disappointing signs.

The jobless rate fell not because Pennsylvanians were finding work but because many of them stopped looking for work last month and were not counted as unemployed.

Their exodus reduced the unemployment rate to 6.9 percent in December from 7.3 percent in November.

Also troubling: Employers shed 11,400 jobs, the Pennsylvania Department of Labor & Industry reported.

“I have two words for you: not pretty,” said Frant Gamrat, senior economist for the Allegheny Institute for Public Policy in Castle Shannon.

While one month's numbers don't make a trend, Gamrat said, the poor showing in December further illustrates the sluggishness of the state's economy in recent months.

The last time the rate was below 7 percent was January 2009, when it was 6.8 percent.

The unemployment rate, estimated from a survey of households, fell because the number of people counted as part of the civilian labor force declined by 15,000 to 6.44 million in December, compared with the month before. And over the year, 92,000 people left the labor force.

“People are getting discouraged and walking away,” Gamrat said.

Meanwhile, the state's employers reported 5.76 million total nonfarm jobs in December, down 11,400 from the month before. The jobs numbers come from a separate survey of employers.

Declines were seen in eight of 11 sectors of the economy, including construction, manufacturing, education and health services.

“We shouldn't be as alarmed as one month of data suggests (we should),” said Kurt Rankin, economist for PNC Financial Services Group, Downtown.

While December's employment data looked bad, Rankin said, he suspects the numbers will be revised to the positive in subsequent reports.

While growth has been sluggish or flat in recent months, there's been little to suggest a major downturn in the state's economy, he said.

“I'm not alarmed,” he said. “I suspect revisions are going to flatten that out.”

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.

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