business

Minnesota employers are getting back into the business of hiring.

The state's private sector added nearly 19,000 jobs in July, the most hiring it has done since April 2005, when employers added 25,000 jobs during the midst of the last economic expansion.

The gains amounted to more than one-quarter of the 71,000 jobs created in the private sector nationwide during the month.

Over the past 12 months, the state has gained a net 29,100 jobs or 1.1 percent, its best overall showing in four years. Minnesota's jobless rate remained unchanged for July at 6.8 percent, partly because government payrolls in the state shrank by 9,100 jobs, making for the state's total net gain 9,800 jobs.

The state jobless rate remains 2.7 percentage points below the national rate of 9.5 percent.

"While we still have a ways to go, Minnesota remains on a steady path to recovery," said Dan McElroy, commissioner of the Department of Employment and Economic Development. "The state has now recovered more than a quarter of the jobs that were lost in the recession."

Steve Hine, director of the state's Labor Market Information Office, noted that the rate of growth for 2010 "is averaging nearly 6,000 jobs a month, with the private sector performing even more strongly.'' The statistics "suggest that the state's recovery is really gathering some momentum."

The state also announced Thursday that only 800 jobs were lost in June, not the 3,700 first thought.

Most of the jobs created in July were in private education/health care, business services, leisure/hospitality, "other services" and manufacturing.

Minnesota's good news comes against a backdrop of new national pessimism about the job market. Seasonally adjusted initial unemployment claims rose 12,000 to 500,000 for the week ending Aug. 14, according to the U.S. Labor Department. The figure for the previous week was 488,000, and the four-week average was 482,500, suggesting that layoffs across the country are trending higher again.

Trouble finding work

Job seekers both in the state and nationwide continue to report a tough time finding jobs.

"I have not worked since January. I have had several interviews but no offers," said Christine Hiatt of St. Paul. The former social worker has been trying to find administrative work without luck. Lately she's applied for waitress jobs. "I feel discouraged, but I try so hard to stay optimistic."

Some 202,500 Minnesotans remain unemployed. Reflecting the discouragement of some who've long been without a job, the state's workforce participation rate -- the percentage of those of working age who have a job or are actively trying to land one -- has dropped by a full percentage point since April.

"It is a little surprising," McElroy said. "I don't think we have a good knowledge as to why."

Hine said normally the percentage rises as the economy improves and people renew job searches.

"We would normally expect to see [the participation rate] moving up as conditions improve and as people re-enter the labor market. ... It's a little bit of a mixed message."

Hine speculated that more people who are eligible may be retiring rather than continue job searches with little promise.

McElroy noted that 30 percent more people turned 62 last year than the year before and that number is expected to go up every year for the next 20 years.

Workweek rises

Two pieces of secondary data collected by the state also point to the emergence of a healthier job market.

First, temporary jobs increased in July after a lackluster June. Second, the length of the average workweek posted a small increase, one-tenth of an hour.

"Now six minutes doesn't sound like a lot, but across 2.7 million jobs, that is 270,000 hours a week or more than 1 million hours a month,'' McElroy said. "So it adds economic capacity in the community. It is a good thing."

The largest job gains in July came from education and health (5,500), professional/business services (4,300), leisure and hospitality (2,900) and other services (up 2,400).

Manufacturing continued its upward climb, adding 1,300 workers. The retail, transportation and utilities sector added 900, while financial jobs grew by 700. Construction added just 600 jobs despite the summer building season.

Government was the only sector to lose jobs.

Over the past year, leisure and hospitality had the largest gains at 15,200 workers, a sign that companies are making bets that consumers are beginning to spend again. Education and health services added 14,200 jobs. (That sector includes private schools but excludes public schools.) Meanwhile business services added 11,100, manufacturing added 3,000 and trade, transportation and utilities added 2,500. Information added just 200 jobs.

The largest year-over-year job losses came in construction (down 6,500), other services (down 4,700), financial (1,600) and logging/mining (down 50).

Dee DePass • 612-673-7725