Joblessness drops 1% from year ago

At 3.9 percent, area unemployment falls to lowest mark since 1970s

The seasonally adjusted unemployment rate in the Pittsburgh region plummeted to 3.9 percent in May — the lowest point on record in southwestern Pennsylvania — the latest sign of the region’s tightening workforce amid a strengthening economy and a wave of retirements.

Joblessness fell more than a percent compared with May 2017, according to a monthly workforce report released Tuesday by the Pennsylvania Department of Labor and Industry.

Seasonally adjusted unemployment is now lower than any month recorded by the state labor department, which maintains records dating back to 1976. The next-lowest rate was 4.1 percent, recorded in March 2007.

In May, the number of unemployed people fell to 46,800, compared with the total regional labor force of 1.2 million.

But the factors at play might not all be positive, economists have warned. There is evidence the rate is falling due to retirements and people giving up looking for work — not due to people finding jobs.

The unemployment rate is falling as hiring in the region remains strong and more people leave the labor force. For more than a year, those two factors have both weighed on the rate, which counts those who are unemployed and have taken specific actions in the past four weeks to look for a job.

The Pittsburgh region’s labor force shrunk by 16,100 over the year, which means there are 16,100 fewer people employed or looking for work. A declining labor force, which has long been a concern of economists, erases small labor force gains seen early of this year.

While the region’s rate “reflects a very stable economic condition overall,” it “may be somewhat artificially low” due to the dropouts, said Kurt Rankin, a Pittsburghbased economist for The PNC Financial Services Group.

The labor force declines are “as bad in year-over-year growth terms as have been witnessed in

the Pittsburgh metropolitan statistical area since early 2015,” he added.

Mr. Rankin pointed to labor department data showing employers in the region have raised wages by 4 percent annually, about double of U.S. wage gains.

That’s a reflection of either employers creating more higher-paying jobs or hiking wages to recruit and retain workers. Either scenario is good news for the region, he said.

It’s a national issue: The U.S. Labor Department announced earlier this month that there are more job openings than people looking for jobs for the first time since at least 2000.

The Pittsburgh region’s annual job growth in May slowed to 1 percent, with employers adding 11,700 jobs since May 2017, according to seasonally adjusted figures. That sits under the statewide annual job growth of 1.3 percent in May.

Construction continued to outpace all large industries with 5 percent growth. (Those numbers are not seasonally adjusted for the gains and losses normally seen throughout the year, making it hard to compare monthly changes.)

With a commercial building boom in the works, construction companies hired 2,700 workers over the year, boosting total employment to nearly 61,600.