The Pittsburgh region's unemployment rate dipped to 5.4 percent in September, which, given the national economic malaise, might signal the calm before the storm.

The drop from 5.6 percent in August was the first in the region since March, making it six months in a row that the rate for the seven-county area (Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland) has been below those of the state, at 5.7 percent, and the nation, at 6.1 percent.

The regional labor force rose to a record 1,223,700, powered by 5,200 new jobs.

The good news came with this caveat: Many of those gains were tied to back-to-school increases that, despite the data being seasonally adjusted, reflect the common fluctuation in startup dates among school districts, colleges and universities.

Retail jobs continued to slip both on a monthly and annual basis, which was no surprise given unemployment data is a lagging indicator on consumer spending.

But even jobs in health care, professional and business services saw drops from August, according to state Department of Labor and Industry figures released today.

Perhaps more significantly, the latest data don't include ripples from the Wall Street crash and credit crisis, which leading local economists say are inevitable.

"It's nice to see the rate declining by two-tenths of a point and the region bucking the trend," PNC senior economist Robert Dye said, "but I don't expect that to continue."

Mr. Dye cited across-the-board job losses last month in manufacturing to retail to engineering services. It's only a matter of time before the recession -- which should become official when a negative-growth, third-quarter GDP is announced within the week -- hits Pittsburgh.

Given the present economic climate, he said an unemployment rate in the high fives or even sixes should surprise no one. He is forecasting a soft labor market extending here through the third quarter of next year.

"If we get back to six, that would be consistent with the recessionary conditions in the local area," he said.

Could it hit even higher?

Nobody is suggesting that the rate will hit 17 percent here like it did in 1983, but the 7.1 percent mark last seen in January 1995 or the consistent, 6-plus rates of 2003 are in the ballpark.

In Harrisburg, Keystone Research Center economist Mark Price said Pittsburgh has held up well, largely due to its strength in sectors such as health care.

"The million dollar question [statewide] is whether it peaks at 6, 8 or 10 percent. I don't know.

"The next few months will be the real test," he said, as he looks for parallels with what happened here in 2001.

"The region was still adding jobs for most of 2001 even as the nation was in a recession," he said. But over the next two years, the Pittsburgh region would shed nearly 19,900 jobs.

"It's hard to judge, but there's no escaping it. Pittsburgh is not an island," Mr. Price said.

Somewhat more sanguine are economist Harold Miller of Pittsburghtoday.org, and John G. Craig Jr., retired Post-Gazette editor and president of the Pittsburgh Regional Indicators Consortium.

They cite the continued job gains and the record-size labor force as positives, particularly when compared with similar benchmark cities such as Cleveland, Detroit, Phoenix and Miami.

"Two of the major industries driving our economy -- health care and higher education -- are not likely to swing downward suddenly because of the market crash," said Mr. Miller, even with the recent layoff of 500 at the University of Pittsburgh Medical Center being factored in.

"The fact that we have a strong stable bank like PNC here likely means more stable lending and credit than many other regions have experienced," Mr. Miller added.

"Only time will tell how significant these data are, as well as whether the region will follow a familiar pattern and come to recession 'late,'" wrote Mr. Craig last week. "But it is worth keeping in mind that Pittsburgh's positive job numbers were not an anomaly."