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
Jackson Hole rose to prominence bc Volcker liked fishing – Economist
Historians will “tar and feather Europe’s central bankers” – Telegraph
Pipeline changes will send more Canadian oil into Minnesota – StarTribune
Hormel had a real good third quarter, beats expectations – AP
Investors pile into Vanguard, eschewing stock pickers – WSJ
Minnesota students reign atop ACT rankings – StarTribune
The future of print newspapers isn’t unclear. It’s clear – Clay Shirky
Study: $12.1b in revenue over 10 years for Twin Metals mine – Duluth News Tribune
Trempealeau County frac sand moratorium to end this month – Winona Daily News
Downtown Des Moines struggles to lure retail – Des Moines Register
The suburban poverty of Ferguson is not that unusual – Brookings
Dollar General ups ante on Dollar Tree in bid for Family Dollar – Bloomberg
Jobs with better pay make a comeback – Washington Post
The Workforce Investment Act has not been effective – NY Times
Schafer: Small increase to minimum wage can take big toll on profit – StarTribune
Microsoft tries to cultivate a startup’s image – New Yorker
Small business lending has been slow to recover – WSJ
Shoddy U.S. roads take toll on economy – LA Times
Minnesota’s solar power surge – StarTribune
Oil companies seek the tech savvy – Houston Chronicle
Minnesota lost 4,200 jobs in July and June’s job gains were revised downward by 3,600, disappointing news in a year so far of tepid job growth for the state.
The unemployment rate remained at 4.5 percent, according to figures released Thursday by the Minnesota Department of Employment and Economic Development. The U.S. unemployment rate in July was 6.2 percent.
State economists cautioned that the job figures may be misleading. Adjusting the numbers seasonally using normal patterns of weather and the timing of school years is complicated, and has been more difficult in recent years thanks to the long, severe winters, said Steve Hine, the state labor market economist.
“By digging into the numbers a bit more deeply than just these top-level seasonally-adjusted numbers, I have to conclude that our job growth and our employment strength is considerably greater than these particular numbers would reveal,” Hine said. “Not only July’s numbers, but the numbers we have seen over the past few months.”
Still, over the first seven months of the year, Minnesota’s job market has been stuck in neutral.
After adding 41,900 positions from August to December of 2013, the state has now added a net of only 2,900 jobs since January. Some 133,000 Minnesotans are officially unemployed, and thousands more are working part-time jobs when they would rather work full-time.
The biggest job losses in July were in private education, which shed 4,800 jobs.
“We really did have a significant cutback in July in private ed that has not been typical,” Hine said.
Information, which includes publishing and broadcasting, lost 1,000 jobs. Construction lost 700 jobs.
The losses were partially offset by gains in manufacturing, retail, transportation and warehousing, hotels and restaurants, and administrative support and temporary jobs.
One bright spot has been heavy construction, which added 500 jobs in July and has added nearly 4,000 positions in the past 12 months.
Meanwhile, Minnesota’s workforce continues to shrink, a sign the unemployment rate will continue to fall.
Labor force participation -- the share of the working-age population that is either working or looking for work -- fell to 70.1 percent. The indicator threatens to fall below 70 percent for the first time since October 1980.
Most of the decline is due to baby boomers retiring, Hine said.
While a smaller pool of workers might help job-seekers in the near term, it is a worrying sign for the long-term health of the state economy, since a robust workforce is key to business expansion.
Laura Kalambokidis, the state economist, said she’d feel better if job growth had been stronger so far in 2014, but other indicators -- like job vacancies, the average worker’s workweek, and the number of people filing for unemployment -- have been positive.
Initial claims for unemployment insurance fell by 14 percent in July compared to a year earlier, to about 10,700.
“It would be more concerning if we were seeing more people laid off,” Kalambokidis said. “Sluggish job growth is not as worrisome as people losing their jobs.”
The debate over the reliability of the monthly job numbers is an old one, and takes on more significance in
an election year.
“They’re volatile, they get revised,” Kalambokidis said.
The state-specific monthly job numbers from the U.S. Bureau of Labor Statistics released Thursday are based on surveys that economists like Hine and Kalambokidis have argued should be interpreted with caution.
Another source of jobs numbers, the Quarterly Census of Employment and Wages, is based on unemployment insurance records, which account for all workers. Those figures are more reliable, but they are released on a six-month lag to give analysts time to collect and carefully adjust the data.
The esoteric debate over job numbers had its time in the sun in 2011, when Wisconsin Gov. Scott Walker argued the quarterly census numbers were more accurate and was lambasted for releasing them early. The fact that he did so a few weeks before his recall election opened him to extra criticism.
This post was updated at 3:22 p.m. on Thursday.
U.S. corn, soybeans record will set record – Des Moines Register
Stanford researchers say fracking occurring in drinking water – LA Times
A wonky look at gentrification “threshholds” in Chicago – Chicago Magazine
Colorado tax receipts from legal pot are 60% below projections – Denver Post
Oil refiners more dependent on pipelines, less on tankers – Houston Chronicle
Once a lunch lady, now head of the National Education Association – Washington Post
Ruling to protect bats will halt summer logging, industry says –Timberjay
The Journal’s editorial board weighs in on Medtronic and tax inversions – WSJ
BPI to reopen Kansas plant that makes
pink slime lean finely-textured beef – Sioux City Journal
Jeff Johnson wins GOP nomination to challenge Dayton for governor – StarTribune
Banks retreat from crucial repo market, worrying the Fed – WSJ
In general, the jobs lost in the recession paid better than the jobs that have been created in the recovery and economic expansion since.
The U.S. Conference of Mayors released a report saying as much on Monday. It's not exactly news, but it's another confirmation of, as John Schmid at the Milwaukee Journal Sentinel puts it, "why the recovery lacks the feel-good quality of previous rebounds."
Schmid did a yeoman's job distilling and summarizing the findings:
...the average annual wage of jobs lost in 2008-'09 was $61,637, while the average wage of jobs gained through the second quarter of 2014 equaled $47,171.
The pre-recession/post-recession wage gap of 23% goes a long way toward explaining why the recovery lacks the feel-good quality of previous rebounds. The disparity implies that national income collectively fell by $93 billion, according to the study.
The crux of the issue is that manufacturing and construction lost a lot of jobs in the recession, but hotels, restaurants, retail and health care have been doing much of the hiring in the recovery. This chart from the report pretty much tells the story:
One other thing worth mentioning. Look at the average annual wages for professional, scientific and technical jobs. The pay is better than any of the other employment sectors listed, and it's one of the top five gainers in the past six years.
This is true in Minnesota too, where Minneapolis has had a professional jobs boom, and signals that there's still a premium for skill in the U.S. job market. However, more than any other sector, the bullish wage trend for professional jobs highlights the growing gap between skilled workers and those with lesser skills.