By SARAH E. MORAN, Special to the Daily Local News

Chester County's jobless rate remained at 6.4 percent in December, identical to the rate in November.

Typically among the Pennsylvania counties with the lowest unemployment numbers, Chester County notched the third-lowest rate in December among the state's 67 counties; only Centre, at 6.0 percent, and Montour, at 6.3 percent, fared better, according to monthly statistics released by the Pennsylvania Department of Labor & Industry's Center for Workforce Information & Analysis.

Said Ryan Sweet, a senior economist with Moody's Economy.com, who keeps an eye on the metropolitan Philadelphia economy, "The Chester County jobs picture is moving in the right direction, albeit slowly and very gradually. The recovery will take time here, just as it will ev

erywhere elsewhere."

He believes that economic recovery is slow to catch on in the Philadelphia metropolitan area, but that, "Conditions are better than they were last year at this time. They'll continue to improve as the year goes on."

Sweet and other Moody's Economy.com economists harbor three major concerns about the regional economy. They are:

The high rate of foreclosures, even though Philadelphia has not been hit as hard as other large Northeastern cities, and certainly not as hard as urban areas in Florida, California, Arizona and Nevada. A surge in the area's foreclosure rate could drive housing prices even lower.

Philadelphia's tenuous fiscal health. The revenue stream for Philadelphia proper is already well below projections, putting new public sector jobs — and jobs that depend on that sector — at risk.

Pharmaceutical layoffs. The spate of recent consolidation in the pharmaceutical industry, coupled with continuing layoffs, is "troubling," Sweet said. "These are high value-added jobs and they affect jobs in other industries. The ripple effect is unavoidable."

The good news? The area's health care and education sectors are holding up relatively well. "We'll lean heavily on them during the recovery," in Sweet's view.

Pennsylvania's jobless rate was 8.9 percent in December, up from 8.5 percent in November. December's unemployment level in the state equals that in October, when it also stood at 8.9 percent.

December's U.S. jobless rate remained steady at 10.0 percent, with the American economy shedding 85,000 jobs. That drop discouraged economists looking for an overall sign that employers are starting to hire again.

All jobless statistics, whether at the local, state or national level, are seasonally adjusted.

The U.S. Bureau of Labor Statistics will release January jobs figures Friday. Consensus among economists holds that the U.S. economy will have jettisoned 59,000 jobs in January, with the jobless rate increasing a tick to 10.1 percent.

The U.S. economy is still far from creating the 100,000 jobs per month to fuel a healthy recovery, Sweet said. The U.S. unemployment rate will continue to edge higher, he believes, topping out at almost 11 percent in third-quarter 2010.

That sobering assessment aside, what worries Sweet and other prognosticators the most is that the U.S. labor force continues to drop, month after month.

From November to December, for instance, the national labor force shrank by 661,000 jobs, the largest month-to-month drop since May 1995. This means that those looking for work are getting discouraged and simply halting their job searches.

It also means that businesses are playing it safe, remaining extremely slow to respond to an improved economic climate. This is occurring despite the news last week that the U.S. economy grew at a surprisingly robust 5.7 percent annual rate in fourth-quarter 2009.

Sweet cautioned, however, to be leery of that optimistic news.

"It came mostly from building up depleted inventories," he said, "and will probably not be repeated for some time to come."

To contact correspondent Sarah E. Moran, send an e-mail to semoran219@msn.com.