Lehigh Valley unemployment falls below 8 percent for the first time in three years

But the drop in the March unemployment rate wasn't supported by job growth.

Lehigh Valley area unemployment has fallen below 8 percent for the first time since March 2009.

The Pennsylvania Department of Labor & Industry reported today that March unemployment dropped to 7.9 percent, down from 8.1 percent the prior month.

While a jobless rate falling below 8 percent could be regarded as a symbolic milestone for a region anxious to rebound from the Great Recession, the decline was not supported by job creation, at least not for March.

On a seasonally adjusted basis, state figures show the amount of local nonfarm jobs actually fell by 3,200, to 340,900.

Steven Zellers, an analyst with the state Department of Labor, described that fall as a “minor blip” in an otherwise slowly recovering job market.  He noted that compared with March 2011, seasonally adjusted nonfarm jobs are up 3,100 over the past year.

“Overall, conditions in the country and state are getting better,” Zellers said. “As long as that holds true, subsets in the state, including (the Lehigh Valley), will also improve.

“I believe we’ll continue to do moderately well over the next couple of months,” Zellers said.

Job creation, over the long run, normally corresponds with a falling unemployment rate. But on a monthly basis those trends don’t always match.

That’s because the state measures resident unemployment, which doesn’t factor that some residents commute to jobs outside the area and vice versa.

The local work force also shrank in March, declining by 1,300 to 423,900. The ranks of unemployed fell by 1,200 to 33,400 over the same time.

The state doesn’t track whether discouraged applicants have stopped searching for work. Labor force estimates only include those employed or actively looking for jobs.

A growing economy normally draws a bigger work force as more people gain confidence to apply for openings.

Slow growth not producing big results

Robert Wendt, director of research at Lehigh Valley Workforce Investment Board Inc., said if those who have dropped out of the pool were counted in jobless figures, the local unemployment rate would be several points higher.

In the big picture, Wendt said the economy simply isn’t growing fast enough to produce a visible improvement in the job market.

The United States gross domestic product rose 2.2 percent in the first quarter. Wendt said that’s about half the rate needed for a strong recovery.

“We’re basically at a standstill,” Wendt said. “We’re not seeing the forward propulsion that you saw late last year.”

Wendt said continued cuts to government are having a negative short-term impact on recovery because loss of work curtails consumer spending.

Local government jobs are down 900, or 2.1 percent, from 12 months ago to 41,900, according to the state.

Area employment figures have yet to include recent closures in the private sector.

Cenveo Corp. in late February announced the shutting of its Cadmus Specialty Publications plant in Wilson Borough, costing 195 jobs. Upper Macungie Township manufacturer International Battery also shut down in March, eliminating about 60 jobs.

Zellers said both of those reductions will likely be reflected in the April report though he did not expect they would have a big impact.

Additionally, T-Mobile USA will close its Hanover Township, Lehigh County, call center in June. That site employs about 600, though some workers were offered relocation opportunities at company sites elsewhere.

Among industries that grew in March, professional and business services posted the largest increase of 500 jobs. That sector includes temporary-staffing agencies such as Manpower Inc. Leisure and hospitality also added 300 jobs.

The state includes Northampton, Lehigh, Warren and Carbon counties when compiling local data.

Local unemployment is worse than the Pennsylvania average 7.5 percent but better than New Jersey’s 9 percent.

The United States, which reported 8.2 percent joblessness in March, reports April figures Friday.

Economists generally say it will take several years of growth to reduce unemployment to its pre-recession norm of about 5 percent.