Despite the apparent good news in the Pittsburgh MSA’s unemployment rate drop to 7.3 percent in March, mirroring the state and national monthly declines, the region’s labor market picture is not a rosy one.
Seasonally adjusted household survey data show the labor force fell by 5,400 in March while the number of people employed declined by 2,300 resulting in a drop in unemployment of over 3,100 (3,200 rounded to nearest 100). Thus, the unemployment rate slid by 0.2 percentage points because labor force fell faster than employment, not because the number of people working rose.
At the same time, the establishment survey of payroll employment, which is not seasonally adjusted, showed the 12 month growth in nonfarm jobs to be a very slow 2,400 while private sector employment managed only an anemic 4,900 rise. The February increase from a year earlier was 5,300. In late 2011 and the first half of 2012 job gains on a year over year basis were in the 20,000 to 30,000 range. The recent six month performance represents a major departure from those heady gains.
By important sector, mining and logging continues to post modest gains, construction enjoyed a slight pickup and manufacturing lost jobs compared to 12 months ago. Trade, transportation and utilities lost 3,600 jobs, led by combined drop of 3,100 in wholesale and retail. On the positive side, financial activities and professional and business services are continuing their recent pattern of exceptional job growth with finance up 2,100 jobs over the last 12 months and business services rising 4,200, propelled by 5,300 more jobs in the professional and technical area. Health services continues to do well but has slowed somewhat posting an increase of 2,400 since March of 2012.
Interestingly, private education, which had been a mainstay of job growth during the lean recession years, saw a decline of 1,000 in employment compared to March a year ago. Similarly, leisure and hospitality, a fast growing sector just a few months ago, experienced a drop of 1,300 jobs compared to last March.
Government employment tumbled by 2,500.
In sum, the overall labor market has slowed dramatically in the first few months of 2013. Still, it is encouraging to see the professional and business sector and financial services sector providing growth while other formerly faster growing sectors have weakened considerably. From here much will depend on the national economy and polices over which the local community has little control. But, an effort to reduce the power and influence of public sector unions would certainly be helpful, as would lowering the State’s corporate profit tax rate.
