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The unemployment rate in the Buffalo-Niagara region fell sharply in September to its lowest point in two years, but the drop may have been more a result of fewer people looking for fewer jobs rather than more people being employed.

The jobless rate fell to 5.6 percent last month, down from 6.2 percent in both August and in September of last year. The rate for Erie County was 5.6 percent, while it was 5.4 percent in Niagara County, both down from a year ago.

But while that may appear good, the number of jobs in Erie and Niagara counties fell by 500, or 0.1 percent, from a year ago, with private sector jobs falling by 2,300 positions, or 0.5 percent. About 531,500 Buffalo-Niagara workers were employed last month, but that's down nearly 10,000 from August and 3,400 from a year ago. That means fewer jobs and fewer people working.

The drop in the number of private-sector jobs is in part due to a technical change, with about 2,500 workers in the Seneca Nation casinos now classified as government workers, not private sector jobs.

However, the Western New York work force -- the number of people available to work -- also shrank from August by a sizable 14,000 to 562,700, the lowest level since December 2001. And 31,200 people were unemployed, a drop of 4,400 from both August and a year ago. Fewer unemployed people looking for work means a lower unemployment rate, but not necessarily a booming job market.

Gary Keith, vice president and regional economist at M&T Bank Corp., said it's normal for the number of available workers to decline in September as people return to school, but "that's a large drop."

He said it could reflect discouraged workers dropping out of the job hunt or people's unemployment benefits running out. But it wasn't caused by more people getting jobs since the number of jobs didn't increase.

"That jumped out at me. I'm not sure what to make of it," he said. "I wouldn't consider it a sign of a strong job market. People should be coming back into the labor pool, encouraged that the economy is moving."

Statewide, the unemployment level fell to 5.5 percent, its lowest level in three years, even with 19,000 more New Yorkers seeking work. However, private sector jobs fell by 5,500, or 0.1 percent, to just under 7 million, while the number of such jobs nationally rose by 0.1 percent.

Locally, manufacturing continued its decline, losing another 2,100 jobs over the year, said state regional labor economist John Slenker. On the other hand, of the 29 service sectors, only six showed losses and three were flat. The remaining 20 added at least 100 jobs each.

"The manufacturing sector is still showing weakness, but the strength in the service-providing sector is very widespread," Slenker said. "We're flattening out. If this continues, we should start seeing positive numbers in the near future."

Nationally, unemployment was 5.4 percent, flat with August. The rate for New York City rose to 6.9 percent, while in the rest of the state it fell to 4.6 percent.

Meanwhile, the monthly Spherion Employment Report conducted by Harris Interactive of Rochester reported that employed adults in New York state are upbeat and increasingly confident about the economy, with 84 percent saying it is unlikely that their jobs will be cut in the next 12 months. That's up from 76 percent in August. Sixty-seven percent also believe the economy is improving or at least staying the same, up from 57 percent in August.

Among other counties in Western New York, the unemployment rates for September 2004, August 2004, and September 2003 were:

Allegany -- 6.3 percent, 6.6 percent and 7.6 percent.

Cattaraugus -- 6.2, 6.4 and 6.5.

Chautauqua -- 5.0, 5.2 and 6.3.

Genesee -- 5.9, 5.2 and 5.7.

Orleans -- 5.1, 6.1 and 6.4.

Wyoming -- 4.4, 4.7 and percent.

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