Area jobless rate down slightly; labor force shrinking

The Pittsburgh region lost 10,700 workers from the seven-county labor force in May and is 31,000 below May 2020 during the covid restrictions on the economy, a problem that continues to plague the region, according to economic data the state released Tuesday.

“The labor force is not showing any rebound since the covid pandemic,” said Chris Briem, a regional economist with the University of Pittsburgh’s Center for Social and Urban Research.

There were 1.16 million workers in the labor pool in Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties in May, which is about 50,000 fewer workers than in May 2019, a year before the pandemic slammed the economy.

Briem said he has not seen any other region with such a lag in the recovery of its labor force.

“I think it is of great concern,” Briem said.

With a shrinking labor pool and an increase of jobs, 10,700 jobs —primarily in leisure and hospitality — the region’s jobless rate fell one percentage point in May to 6.5 percent, which was less than one-half of the 14.2% unemployment rate, as adjusted for seasonal hiring factors, according to the state’s Center for Workforce Information and Analysis.

With workers not returning to their jobs in the numbers anticipated, “it’s kind of scary,” said Jake Haulk, president emeritus of the Allegheny Institute for Public Policy, a Castle Shannon-based think tank.

Haulk speculated the region will see job growth, “especially if they pull out some of the (extra) job benefits,” Haulk said.

Twenty-six states already have ended the extra $300 in federal unemployment benefits and pay for freelance workers, before the program is set to expire on Sept. 6.

The job growth the region experienced in May came in large part from the leisure and hospitality sector that is recovering from the pandemic-related restrictions. It reached 99,800 jobs in May, 39,100 more positions than in May 2020, the state said Tuesday.

As evidenced by the help wanted signs, employers are looking for more workers. That could mean a job for some of the 75,200 people out of work in May. On the bright side, the jobless rolls reached almost 169,000 in May 2020 in the Pittsburgh region.

There were 1.12 million nonfarm jobs in May, an increase of 10,700 jobs. Adjusting for seasonal hiring factors, the number of nonfarm jobs in the Pittsburgh region rose by just 3,300 over the month.