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Pittsburgh region unemployment on the rise

| Tuesday, Oct. 27, 2015, 9:54 a.m.

The Pittsburgh region's job market hit a September swoon as summer hiring came to an end and companies trimmed staff amid a slowdown in the national economy.

The unemployment rate for the seven-county metro area rose two-tenths of a percentage point to 5.3 percent last month, the Pennsylvania Department of Labor & Industry said Tuesday. Employers shed 1,600 nonfarm jobs in a broad hiring slowdown that included contractors, entertainment venues, retailers, manufacturers and financial firms.

Some contraction in the job market was to be expected as the summer tourism season winds down, but the losses point to broader pressures, said Kurt Rankin, an economist with PNC Financial Services Group.

“Pittsburgh may see a rough rest of this year and early into next year,” Rankin said. “Job growth is going to be tough to come by.”

The growth in corporate profits has stalled after years of double-digit gains, and global economic uncertainty has made companies cautious. Professional and business services in Pittsburgh cut 2,300 jobs last month as demand for administrative and technical services waned.

Meanwhile, American steel manufacturers have been struggling to compete with cheap imports from China and the impact of a strong dollar, which has made U.S. goods more expensive — and less attractive — in overseas markets. The dollar's strength lowers revenue that companies get when they translate overseas sales into U.S. currency.

Some of the biggest losses were in seasonal-related industries such as entertainment and construction.

Leisure and hospitality, a sector that experienced some of the strongest hiring in recent months, lost 7,400 workers in September. Construction contractors that have been a boost to hiring cut 1,900 people.

Sharp September declines in those areas are not surprising, however, because they had a significant ramp-up in spring and summer, said Frank Gamrat, an economist with the Allegheny Institute for Public Policy in Castle Shannon. Both sectors have gained workers from a year ago.

“There's no reason for immediate concern,” Gamrat said. “It's just a bit of cooling off from a hotter summer.”

The start of school kept overall job losses in check, because educational services added 5,200 workers.

Retailers hiring for holiday shopping could provide some short-term boost to the economy, Rankin said, but it is unclear from where permanent job gains will come.

The natural gas industry, once a booming sector, has been hurt by sustained low gas prices that caused many drillers and service companies to put hiring on hold. Employment in mining and logging was flat in September.

“Natural gas pipelines are still being built, but not as rampantly as if natural gas prices were higher,” Rankin 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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