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Pittsburgh region unemployment rises to 5.7%

The Pittsburgh region’s unemployment rate increased in July amid signs of growing frustration for job seekers.

The unemployment rate for the seven-county region increased to 5.7 percent in July, as gains in construction hiring were not enough to offset seasonal pullbacks in school employment and falling demand in many service industries, according to data released Tuesday by the Pennsylvania Department of Labor & Industry.

Employers in the seven-county region shed 11,400 nonfarm workers from payrolls last month, not seasonally adjusted. Meanwhile, hundreds of people gave up a job search. The labor force declined by 900 people in July, an indication that some job seekers have stopped looking for work out of frustration.

PNC Financial Services Group economist Kurt Rankin said the unemployment rate would likely hover around the current level for the rest of the year unless something comes along to spark business growth.

“It’s not a blip. It’s not something that will come and go away through the natural course of job creation,” he said, “unless there’s more appetite for business creation among potential entrepreneurs.”

It’s not apparent where that appetite will come from, Rankin said. A report released last week from the Ewing Marion Kauffman Foundation ranked Pittsburgh last among 40 large cities for startup creation, and job growth has been slow across a broad range of sectors.

The boom in the Marcellus shale fracking industry helped Pittsburgh recover from the recession more quickly than other cities, but natural gas employment has been declining as low gas prices forced producers to cut back. That trend continued in July. The mining and logging sector lost 200 workers in July and is down 2,000 from a year ago.

“You’re back to the old Pittsburgh we knew before the drilling, and that’s slow growth,” said Frank Gamrat, an economist at the Allegheny Institute for Public Policy. “It’s a lack of dynamism.”

Eligible workers are sitting on the sidelines and waiting for opportunities to open while others are moving out of Pittsburgh in search of jobs, Rankin said. Census data showed that 2,500 people moved out of the Pittsburgh region last year, and he suspects many of them were leaving for better employment prospects elsewhere.

The region has added a few thousand jobs over the past year, but the growth has not kept pace with the increasing number of people who are looking for work.

Pittsburgh’s unemployment rate has increased by more than half a percentage point from a year ago and is above the statewide and national levels. Pennsylvania unemployment in July was 5.6 percent; the national rate was 4.9 percent.

Chris Fleisher is a Tribune-Reviewstaff writer. Reach him at 412-320-7854.


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