Pittsburgh region struggles to recover as unemployment rises slightly

The Pittsburgh area’s recovery from depths of the pandemic-caused recession slowed in December, as 5,300 jobs were lost in the region, pushing the unemployment rate up slightly at the end of the year, the state said Tuesday.

“We‘re still kind of scuffling along,” said Frank Gamrat, executive director of the Allegheny Institute for Public Policy, a Castle Shannon-based think tank.

The 117,600 nonfarm jobs in December in the seven-county Pittsburgh region — Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland — is 86,000 fewer than in 2019 and “was the worst December in a decade,” Gamrat said. The region’s economy has not seen December job numbers this low since the last deep recession when there were only 1.125 million jobs in December 2009, Gamrat said.

The job loss, however, was not unusual for December, which typically has fewer jobs than in November, Gamrat said. The number of jobless workers in December remained relatively stable at 78,800, based on seasonal hiring factors, according to the state’s Center for Workforce Information and Analysis.

The region’s unemployment rate rose 0.1 percentage point from November to 6.8%, based on seasonal hiring factors. The December jobless rate is 2.0 percentage points higher than pre-recession rate of 4.8% in December 2019.

The 6.8% jobless rate is within a range that is not uncommon for the region over the last few decades, said Chris Briem, a regional economist for the University of Pittsburgh’s Center for Social and Urban Research.

“The unemployment rate is that low really because there has been such a significant contraction in the region’s labor force, which remains down over 58,000 from year ago levels in December,” Briem said.

Gov. Tom Wolf’s orders shutting down casinos and indoor dining at restaurants and bars from mid-December until Jan. 4 slammed the leisure and hospitality industry, which shed 7,600 jobs last month. Casinos typically do well in December when out-of-town visitors come home for the holidays and are seeking an entertainment venue, Gamrat said.

Although the economy still has 216,000 fewer jobs than it had in April 2020 when pandemic-related shutdown took hold, Gamrat sees light at the end of the tunnel.

“I think it is going to get better as vaccinations ramp up,” he said. “I think once people are comfortable with going out and spending money,” the economy will pick up, but “it will be a slow” climb back.

But, from Briem’s perspective the region’s labor “has not sustained any significant rebound from the spring and could be a bigger issue for the region going forward once the public health concerns abate.”