Low Unemployment, But Fewer Workers

Photo by Rich McPeek


There’s good news and bad news for southwestern Pennsylvania when it comes to the latest unemployment data. The good news is the region’s seasonally adjusted unemployment rate fell steeply from 6.0 percent in September 2016 to 4.8 percent in September 2017.

The bad news is the low unemployment rate is likely due to people exiting the labor force and perhaps leaving the region. The number of people in the labor force decreased by 24,100 in the seven-county Pittsburgh Metropolitan Statistical Area from September 2016 to September 2017.

The Pittsburgh region’s unemployment rate also falls below the national unemployment rate of 4.2 for this period. Stagnant job growth and falling behind the national trend of job creation may be leading workers to look outside of the Pittsburgh region for work.

“One way or another we’re going from coming out of the recession and seeing net positive individuals coming to the Pittsburgh region, many of them likely of the working age, to now seeing individuals leaving or not gaining individuals in the labor force,” said Kurt Rankin, an economist at PNC. “Neither of those stories would be good for an economy like Pittsburgh’s, which prides itself and tells its story as attracting new industries.”

Within the region, Butler County has the lowest unemployment rate at 4.4 percent, while Fayette County has the highest rate at 6.5 percent.

Unlike the region as a whole, Butler’s low unemployment rate is likely due to the stability of its labor force and having one of the stronger economic centers in Cranberry, where the growing leisure and hospitality industry is a major component of its economy.

But with the region’s unemployment at 4.8 percent and only 4.5 percent of people in the labor force in Allegheny County looking for work, the region could be close to full employment. But that doesn’t mean there isn’t more work to be done.

“Pittsburgh is underperforming its potential if you look at total employment in the Pittsburgh area,” said Rankin. “If Pittsburgh is only capable of remaining stagnant, then Pittsburgh is operating at full employment. The fact that we’re seeing labor force declines, seeing some outmigration, suggests that Pittsburgh is underperforming.”