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Pennsylvania unemployment rate drops to six-year low

Pennsylvania’s job market emerged from a slumber in October as hiring picked up and the unemployment rate dropped to a six-year low.

The improvement reported Friday by the Department of Labor and Industry followed several disappointing months that prompted concern that the state was being left behind as the nation’s economy gained momentum.

A confluence of events — retailers and shipping companies ramping up for the holiday season, lower gasoline prices, plus improvements in the housing market — may have fed last month’s gains and portend positive growth, said PNC economist Kurt Rankin.

“It’s a step in the right direction after several months in a row of the labor force declining outright,” Rankin said.

Employers added 12,600 jobs and the unemployment rate fell three-tenths of a percentage point last month to 5.4 percent, the state Labor Department reported. Total nonfarm jobs rose to highest level since August 2008.

The strongest growth was made on the service side, led by trade, transportation and utilities adding 5,500 workers as retailers and shipping companies geared up to meet holiday shopping demand. That sector has gained 17,900 workers from a year ago, an increase of 1.6 percent.

Shippers such as FedEx and UPS have been adding seasonal workers to handle growing demand for gift shipping this year. FedEx plans to add 300 workers across Pittsburgh and most of Pennsylvania. UPS is adding 5,600 seasonal workers in the state.

“We started first ramping up drivers because there’s much more training that goes into it, and those would have begun at the beginning of October along with package handling,” said UPS spokeswoman Susan Rosenberg.

The state’s labor force — the number of people working or looking for work — picked up steam after declining in late summer. The labor force lost 28,000 workers in August and remained essentially unchanged in September before gaining back 15,000 workers in October.

Still, the labor force is down 1 percent from a year ago. It will need to show more sustained growth accompanied by higher employment before wages increase as companies compete for talent in a tighter job market.

“This is the kind of report that nudges you in the right direction, but it’s not going to throw off more (income tax) revenue for the state,” said Frank Gamrat, an economist at the Allegheny Institute for Public Policy, a conservative think tank in Castle Shannon.

Declining gas prices and an improved housing market may provide a psychological boost to consumers as they start shopping for the holidays. Home prices in Central Pennsylvania have improved for the first time since the recession ended, Rankin said, and the market in Western Pennsylvania is getting better. Average home prices in the five-county Pittsburgh region grew 6.8 percent in the past year, and the number of homes sold is up 6.3 percent, according to RealStats.

The state appears to be following the national trend of economic growth and lower unemployment, said George Mokrzan, director of economics for Huntington National Bank. The national unemployment rate is 5.8 percent, down from 7.2 percent a year ago.

“It’s very good to see the headline unemployment rate drop that low and be below the national average,” Mokrzan said. “That’s the objective of this whole economic recovery to get the unemployment rate down to reasonable levels.”

Chris Fleisher is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or [email protected].


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