Western Pa. region's labor force shrinks again, jobless rate falls

The Pittsburgh region’s jobless rate fell in December to 5.3%, the lowest in 2021, but more people dropped out of the labor force, continuing a baffling trend that has been a constant throughout the covid pandemic.

“The Pittsburgh labor force levels have really not seen any rebounds from the loss seen in covid,” said Chris Briem, regional economist for the University of Pittsburgh’s Center for Urban and Social Research.

The unemployment rate in the seven-county region dropped by 0.4 % in December as adjusted for seasonal hiring factors, but there were 4,300 fewer people remaining on the job or looking for work that month. The labor force in Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties dropped to 1.157 million workers, 15,000 fewer than in December 2020 and 60,000 less than two years ago, before the covid pandemic locked down the economy.

“I think there has been a reset in the labor force,” Briem said.

It is likely that many of those workers who left the local workforce did not remain in the Pittsburgh region to return to those jobs, Briem said. There is not a flow of people into and exiting the labor force — as well as not an influx of people who moved from another region — into Western Pennsylvania to take a job, Briem said.

While some employers felt that workers might return to their jobs when the $300 weekly supplemental unemployment compensation checks ended Sept. 4, that has not been the in case. Since September, 7,300 people have left the workforce in the region.

The region’s economy lost 3,600 nonfarm jobs in December, falling to 1.38 million, which was 59,000 fewer than a year ago and 62,000 less than in December 2020.

Leisure and hospitality, a sector hard hit by the pandemic-related restrictions, lost 500 jobs to fall to 100,000, but it is 18,000 more than a year ago, an indication of the reopening of the economy.