HARRISBURG, Pa. (AP) — Pennsylvania’s unemployment rate dropped in March to the lowest rate on record, as payrolls hit a new record high and the number of people unemployed shrank to its lowest level since 2000, the state Department of Labor and Industry said.

Pennsylvania, one of the nation’s slowest-growing state economies in recent decades, saw its unemployment rate drop by one-tenth of a percentage point to 3.9% last month, the department said. Pennsylvania’s rate had twice previously hit 4% since 1976, which is as far back as the state says its records go.

The improvements in Pennsylvania are generally tracking national trends, although economists identified weaknesses in Pennsylvania’s wage growth.

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The national unemployment rate was 3.8% in March. That puts it around the middle of the pack among states.

Pennsylvania’s economy has lagged other states’ in recent decades because of its relatively slow-growing and older population.

“But comparing Pennsylvania against itself is where these numbers allow you to say that Pennsylvania is doing well,” said Kurt Rankin, a Pittsburgh-based vice president and economist for The PNC Financial Services Group.

Pennsylvania’s low unemployment rate is sustainable for the time being, economists said. But, with the labor force growing, Rankin said it is possible the shrinking unemployment rate could stall if more people are entering the workforce than can be absorbed.

A survey of households found Pennsylvania’s civilian labor force grew by 5,000 in March, as the number of people employed rose by 10,000 to a new record high of more than 6.2 million. The number of unemployed shrank by 6,000 to 255,000, its lowest level since 2000.

Still, the underemployment rate — a measure of people who have part-time work but want full-time work — remains elevated at 8.4%, above where it was in 2007, at 7.7%, before the recession began, said Mark Price, a labor economist with the Keystone Research Center in Harrisburg.

“There’s clearly still some weakness,” Price said.

A separate survey of employers showed Pennsylvania’s seasonally adjusted nonfarm payrolls rose by 4,000 in March, to a record high above 6 million. March’s figures are preliminary and could change.

Economists singled out various sectors, including the state’s transportation and utilities sector, as having shown strength.

There is also anecdotal evidence that businesses can’t find workers with the skill sets they are seeking, such as in construction and manufacturing, and that could force employers to pay more, Rankin said.

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“What that could translate into is something that Pennsylvania could use, which is a stronger wage growth trend,” Rankin said.

Wage growth, he said, has lagged that of a couple comparable states, Ohio and Michigan, in the past couple years.

Price said median wage growth, adjusting for inflation, rose 3% last year, with hourly wages for the typical Pennsylvania worker rising from $18.64 per hour to $19.27 per hour.

That’s what should be expected with a low unemployment rate, Price said.

But, Price said, Pennsylvania’s median wage growth has been sluggish over the decade-long expansion, rising just 2% since 2009, with much of that growth concentrated among the highest-wage earners.