What are the forces moving the Minnesota economy? Adam Belz tries to identify the trends and show the connections between Minnesota and the larger U.S. and global economies. You can connect with him on Twitter: @adambelz

Minnesota jobs stall in August as employers cut 2,000 positions

Posted by: Adam Belz under Business trends, Economics Updated: September 20, 2012 - 11:04 AM

The Minnesota job market stalled in August, shedding 2,000 jobs.

On top of that, July’s job count was revised downward by 2,000. The most troubling signs are in manufacturing and construction, sectors that had been performing well on the year.

Manufacturers cut 2,700 jobs in August, erasing more than half the gains over the past 12 months, and construction companies dropped 1,300 jobs. Both sectors still are up compared to a year ago, but the gains have gotten thinner.

"Despite solid job gains in the previous two months, the labor market is still struggling to find its footing," Mark Phillips, commissioner of the Minnesota Department of Employment and Economic Development, said in a statement. "The long-term trend remains positive, however, with the majority of business sectors reporting job growth over the past year."

The one sector that buffered the losses was government jobs, reflected primarily in hiring at public schools. Officials with DEED said that could well be a timing issue, and the gains might not be as big as they appear.

Minnesota has clawed back more than half the jobs it lost in the recession, and unemployment is still well below the U.S. average, but the August jobs report shows the state is growing slower than the rest of the country.

“The national job growth of 96,000 in August was disappointing, it certainly was a reminder that our recovery is at best tentative,” said Steve Hine, labor market economist at the DEED.

Here’s some more data released by DEED:

Government added 5,400 jobs in August, followed by education and health services (up 1,900), information (up 900), and leisure and hospitality (up 300).

Job losses occurred during the month in trade, transportation and utilities (down 3,400), manufacturing (down 2,700), construction (down 1,300), financial activities (down 1,100), other services (down 1,100), professional and business services (down 600), and logging and mining (down 300).

Over the past year, job gains have occurred in professional and business services (up 11,700), education and health services (up 11,400), government (up 10,000), manufacturing (up 2,100), information (up 1,700), financial activities (up 1,600), construction (up 1,600), and logging and mining (up 100).

Year-over-year job losses occurred in leisure and hospitality (down 8,300), trade, transportation and utilities (down 6,700), and other services (down 500).

In the state Metropolitan Statistical Areas, job gains occurred in the past 12 months in the St. Cloud MSA (up 2.5 percent), Minneapolis-St. Paul MSA (up 1.1 percent), Mankato MSA (up 1 percent) and Rochester MSA (up 0.1 percent). Job losses occurred in the Duluth-Superior MSA (down 1.5 percent).

DEED is the state's principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and our services, visit us at www.PositivelyMinnesota.com. Follow us on Twitter at www.twitter.com/PositivelyMN 

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