The Pittsburgh area’s unemployment rate improved to 5 percent in August from 5.6 percent in July, partly due to jobs created by retailers and temporary agencies, according to state data released Monday.
The jobless rate was the lowest in the six counties since December 2001, when unemployment stood at 4.8 percent, according to the Pennsylvania Center for Workforce Information and Analysis.
But don’t pop any corks yet. The encouraging jobless rate had less to do with greater hiring than it did with fewer people in the labor force.
The labor force — defined as the number of people working or actively looking for a job — fell by 26,500 in August, compared with a year earlier. That means the percentage of employed people rose, even though actual hiring slid by more than 20,000.
In August 2002, when unemployment was 5.4 percent, there were 1,145,400 people holding jobs in the region. Yet last month posted a 5 percent jobless rate, even though fewer people — 1,125,100 — held jobs.
“So although it looks wonderful that the unemployment rate had dropped, it’s not as good as it seems,” said Michele Hiester, labor market analyst for the state.
“The labor force has been impacted by the struggling economy,” said Hiester. “There’s still a lot of discouraged workers out there, which means they’re not looking for work and not counted in the labor force.”
The six-county region’s labor force peaked at 1,213,300 in May 2002, versus 1,184,200 last month.
Each month, the state surveys businesses in Allegheny, Beaver, Butler, Fayette, Washington and Westmoreland counties, as well as the city of Pittsburgh, to determine employment.
The region’s jobless rate last month, however, beat the state and the nation. Pennsylvania posted 5.2 percent unemployment last month, while the U.S. rate stood at 6.1 percent, the agency said.
Retail was one sector in a hiring mood in August. Retailers — especially mass merchants and clothing stores — added 300 jobs last month, as parents prepared youths to return to school.
In addition, temporary employment agencies hired about 500 last month. The additions are likely “a positive sign,” said Hiester.
“Increases in temporary help is the first step employers usually take before hiring full-time workers,” said the labor market analyst.