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
As the economy has recovered and the unemployment rate fallen, there have been no shortage of objections to the statistics.
A gentleman emailed me this week, after we ran a story on the Twin Cities having the lowest unemployment rate of any large metropolitan area in the nation, saying that U.S. unemployment has fallen only because more people are collecting disability payments. Another said I should have taken into account which jobs are created by government and which by "actual market demand." (That's a discussion for another day.)
But the most common objection to the good news of declining unemployment has been that the reason it's falling is because more people are giving up the search for a job and dropping out of the work force.
This has (sort of) been true in some months. The number of “discouraged workers,” as the Bureau of Labor Statistics puts it, rose dramatically during the recession. Those workers are not counted as unemployed, because they are not technically looking for a job, so, the argument goes, the unemployment rate doesn't accurately reflect the job market.
But the number of discouraged workers in America can no longer be used as an explanation for why unemployment is falling. In June, according to the latest numbers from the Department of Labor, the number of discouraged workers fell to 676,000, its lowest level since December 2008.
As you can see the total number of discouraged workers has been falling steadily since the recession:
There are other reasons the unemployment rate is falling, particularly in Minnesota. More people are retiring, so the labor force has begun to shrink. But discouragement is no longer a serious reason for the falling unemployment rate.
Minneapolis-St. Paul has the lowest unemployment rate of any large metropolitan area in the United States, according to the data released today.
The Twin Cities unemployment rate of 4.0 percent came in just a bit lower than Austin, Texas, at 4.1 percent, and Columbus, Ohio, at 4.4 percent. The Minneapolis, St. Paul and Bloomington metro area has twice the population of each of the other two metro areas.
Rounding out the top five are Oklahoma City, with an unemployment rate of 4.4 percent, and Boston, with an unemployment rate of 4.7 percent.
Here are the top 20 from the Bureau of Labor Statistics. The figures are by place of residence, and are up-to-date as of May.
Firms in Minnesota that provide services to other businesses – like accounting, legal, public relations and architectural outfits – are more confident about their prospects than they were a year ago.
According to a survey of Minneosta business services firms released Monday, 52 percent believe their revenue will grow over the next 12 months. That’s compared to 46 percent a year ago.
Some 44 percent believe profits will rise over the next 12 months, compared to 41 percent a year ago.
The survey, conducted by the Federal Reserve Bank of Minneapolis and the Minnesota Department of Employment and Economic Development, collected responses from 241 business services firms in April and May.
An argument could be made that the predictions are too pessimistic, as well. In 2013, 46 percent of respondents said they expected revenue to climb over the next 12 months. But when asked in 2014, 51 percent said revenue had increased.
The survey also asked questions about the North Dakota oil boom and its effect on Minnesota business services firms. Some 17 percent of respondents said North Dakota’s oil patch has driven sales for their firm, but 96 percent said it has had no impact on hiring.
On Friday I attended a forum on the business vitality of Minneapolis-St. Paul. Most of the indicators are good.
In its peer group -- which Greater MSP and the Minneapolic Chamber consider to be Austin, Boston, Chicago, Denver, Pittsburgh, Portland, Raleigh, San Diego and Seattle -- MSP ranks second for Fortune 500 companies, economic competitiveness and a low unemployment rate.
The Minnesota tax climate is ninth out of ten, according to the Business Vitality Index, and venture capital and small business vitality don't rank well either. The Twin Cities are also tenth in the group when it comes to income inequality. Still, quality of life is tops here by five measures, and there's lots for the Twin Cities to feel good about.
I can't find the documents online to link to them, but one thing that was interesting to me was the peer group that the chamber and Greater MSP selected. Here are the GDP rankings for the 10 cities from 2012, which is the most recent year for which we have city-level GDP data.
Clearly Chicago shouldn't be in the peer group. It's way bigger than the others. But the ranking gives a good picture of where MSP sits in the universe of large cities in the country -- right in there below Boston and Seattle, but above San Diego and Denver. I'm not sure Raleigh deserves to be in the group.
Per capita GDP is one of the key measures used in the index, so I ran the stats and tried to figure out the rate of growth in each of the 10 cities, in real per capita GDP. In other words, how fast is each city growing its GDP per capita?
As you can see, Portland is cruising, as are Austin and Seattle and Boston. Pittsburgh looks strong in the past three years too.
You can slice the numbers yourself here, if you're interested. The 2013 GDP data will come out on June 11, I believe. We'll have plenty more to look at then.
It’s official: Theology and religion majors are among the least likely new college graduates to get a job in Minnesota.
Only 14 percent of those who earned a bachelor’s degree in 2011 in theology and religion had a full-time, year-round job in Minnesota in their second year after graduation, and the median annual wage for those newly-minted graduates was $16,851, according to a new data tool rolled out this week by the Minnesota Department of Employment and Economic Development.
The data highlights just how tough the job market is for new college graduates. Of nearly 30,000 people who graduated from a Minnesota college in 2011, nearly 70 percent did not have a full-time, year-round job during their second year after graduation.
The good news is there are courses of study that lead to better job prospects. Half of engineering majors had a full-time job in their second year after graduation, and their median annual wage was $53,488.
Graduates with computer science degrees had a job a year after graduating 56 percent of the time, and their median annual wage was $51,141.
Business and personal culinary services degrees also tended to pay off.
But for the majority of graduates, finding a full-time job by the second year after they got a diploma has been difficult.
The tool, part of a collaborative effort with the Minnesota Office of Higher Education, was developed using data involving students who graduated from post-secondary programs in Minnesota between July 2009 and June 2011. Those students were then tracked (using Minnesota unemployment insurance records) to find out how many were working and how much they were making in the first and second years after graduation.
“The Graduate Employment Outcomes tool will give students a clearer picture of the Minnesota labor market and what fields of study offer favorable career opportunities,” said DEED Commissioner Katie Clark Sieben. “At the same time, planners can use the tool to develop training and educational programs that fit employer needs.”
Larry Pogemiller, commissioner of the Minnesota Office of Higher Education, called the tool a “groundbreaking effort by state agencies” that gives students “a much clearer picture of where the jobs are, and what fields of study provide the best earning potential.”
Users of the tool can look at employment and wages for people with associate’s degrees, graduate degrees and certain types of certificates.
I used it to look at bachelor’s degrees. Here’s what I came up with: