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Pittsburgh region unemployment rate declines to 5.5%; broader outlook dim

| Tuesday, Aug. 2, 2016, 9:27 a.m.

Pittsburgh area employers picked up the pace of hiring with the start of summer, but economists said the broader outlook for the job market remains dim.

The seven-county region bounced back from a sluggish May by gaining 9,400 jobs in June and dropping the unemployment rate two-tenths of a percentage point to 5.5 percent, the Pennsylvania Department of Labor & Industry reported Tuesday.

Some bounce in hiring is typical with the start of summer as hotels and entertainment venues fill seasonal staffing needs. Still, economists saw very little to be enthusiastic about long-term. The unemployment rate is three-tenths of a percentage point higher than a year ago and, adjusting for seasonal variations, job growth has been essentially flat since June 2015 with just 1,300 positions added.

“Year over year, it's really an incredibly poor number,” said Jake Haulk, an economist at the Allegheny Center for Public Policy. “If there was any bounce, it wasn't very big.”

The biggest job gains came in seasonal industries like the leisure and hospitality sector as well as construction.

The mining and logging sector continued to struggle, shedding 100 jobs, as coal companies and natural gas drillers cut back while a glut of supply depressed energy prices. Manufacturers added 400 jobs in June, though their payrolls are down by 2,700 from a year ago, due largely to slackening demand for products sold to energy producers.

The first half of 2016 has been a challenging one for Pittsburgh, said Mark Price, a labor economist at The Keystone Research Center in Harrisburg. Seasonally adjusted, the region has lost an average of 400 jobs per month since January, and there are no obvious signs of a turnaround soon, he said.

“I don't think things are moving in a good direction in the region,” Price said.

Pittsburgh needs some kind spark coming from outside the city to spur demand for the goods and services produced here, economists said. But there have been mixed reports on the national economy. Hiring surged in June across the United States, but the pace of economic output in the second quarter was the slowest in three years, with real gross domestic product growing only 1.2 percent.

Pittsburgh's job prospects look brighter in a year and a half when Royal Dutch Shell breaks ground on a petrochemical plant in Beaver County. The project is expected to generate 6,000 construction jobs and 600 permanent jobs, along with a bigger local presence from the industries and manufacturers that will supply ethane to the facility. Construction is set to begin by 2018 and be operational in several years.

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

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