Labor force shrinkage continues

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Pennsylvania's unemployment rate fell for two straight months, from 7.7 percent in August to 7.6 percent in September and then 7.5 percent in October, according to figures released Friday by the Bureau of Labor Statistics. The report covered two months because the partial government shutdown in October delayed the reporting on September's figures.

The state's falling unemployment rate mostly reflects the declining number of people who are in the labor force. According to the Bureau of Labor Statistics' report, the number of people who were in the state's labor force, which means they were either working or looking for a job, fell by 41,000 over the past two months.

Mark Price, a labor economist with the Keystone Research Center in Harrisburg, said that the labor force has been declining since the beginning of the year and is now down by 81,000 since January.

The federal government figures also showed that from August to September the state suffered a net loss of 7,400 jobs. Payrolls remained steady in October.

The report on employment is based on two separate surveys: One of households, which is known as the current population survey, reports the number of people who say they are working, looking for work or out of the labor force. According to that survey, 16,400 fewer people were unemployed over the past two months and another 24,600 fewer people reported that they were working during that time.

Friday's report marks one of those counterintuitive moments when what looks like good news is really bad news because while the unemployment rate is declining, it is doing so because people are giving up looking for a job. That is the opposite of those months, earlier in the recovery, when rising unemployment turned out to be good news because it meant more people were looking for work.

A separate survey of employers that determines how many people were on payrolls in the state showed that the largest loss of jobs was in the government sector, which was down by 9,300 jobs.

Mr. Price said, "those government numbers run counter to what we might have expected. The losses in the public sector were not concentrated in federal employment (down 600) but in local government (down 9,700). State employment climbed by 1,000 jobs from August to October."

Other losses were seen over the two months in education and health services, which is down 7,300 jobs; leisure and hospitality, down by 4,600 jobs; and financial activities, down by 1,100 jobs.

The heavy job losses in the public sector wiped out gains in the private sector. A release from the Pennsylvania Department of Labor and Industry noted that employment in private industry, which gained 5,700 jobs in October, has reached its highest level since August 2008.

Manufacturing and construction jobs were both up, by 4,400 and 2,000 respectively, from August to October. Professional and business services saw a big jump in employment, by 7,300 jobs. Trade transportation and utilities added 2,600 jobs over the two months.

Ann Belser: or 412-263-1699.

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