Minn. adds 6,800 jobs, but jobless rate rises

  • Article by: ADAM BELZ , Star Tribune
  • Updated: August 16, 2012 - 7:38 PM

While new jobs offered hope of modest growth, unemployment rate ticked up to 5.8 percent.

Minnesota employers added 6,800 jobs in July, the second straight month of solid job gains that offer evidence of modest economic growth in the state.

Over the past 12 months, Minnesota has added about 30,000 jobs, led by consistent strength in the health care industry, steady progress in manufacturing and rapidly rising demand for computer-related and administrative support workers.

"We do seem to have an economy that is growing jobs in a lot of sectors that pay higher-than-average wages," said Kyle Uphoff, a regional analyst for the Minnesota Department of Employment and Economic Data, which released the jobs numbers Thursday. "In many cases, those gains are in industries that are growing faster than the U.S. average."

Yet, as is often the case with monthly jobs reports, the July numbers are mixed. June job gains had to be revised downward by about 3,000 because of late reporting from some private education institutions.

About 5,500 Minnesotans lost jobs in July, forcing an uptick in the unemployment rate for the first time since March, even as the labor force participation rate -- the number of people either working or looking for work -- declined slightly. The state jobless rate of 5.8 percent remains well below the U.S. rate of 8.3 percent.

"We don't have a lot of direction from these reports whether the economy is growing fast or is stagnating," said Toby Madden, an economist at the Federal Reserve Bank of Minneapolis. "It's kind of mixed and it's kind of going with our statistical forecasts and what business leaders are telling us, which is continued growth, but pretty modest."

The Federal Reserve will issue its Beige Book report on the regional economy next week.

Of the 156,300 jobs Minnesota lost between the top of the housing boom in February 2008 and the bottom of the bust in September 2009, the state has now clawed back 86,400, or 55 percent.

"We're not over the hump yet. We're not back to where we were at the start of the Great Recession," said Tom Stinson, the state economist. "But we're continuing to move along that way, and the numbers we saw today are just another step."

The economy is creating jobs in manufacturing, financial services, education and health care, and professional and business services. Manufacturing added 1,700 jobs in July, and has added 4,900 in the past year, methodically adding up gains since dipping in March.

The health care industry has hardly been affected by the downturn and recovery. Health care and social assistance as an industry has added 14,100 jobs in the past year, bringing its total to 414,600, or 15.3 percent of all jobs in the state.

Computer design and related services, a category in which 33,120 people in the state work, has grown 14.6 percent in the past 12 months, adding about 4,200 jobs. That's the most jobs in that industry since the dot-com crash in 2001, Uphoff said.

But the state is losing jobs in categories that involve customer service. The leisure and hospitality category -- which includes hotel, restaurant and bar work -- has shed 9,300 jobs in the past year, evidence of nagging consumer anxiety, Uphoff said. That pain extends to retail trade, a giant sector of the state's economy that's shed about 8,500 jobs in the past year.

"The bad news here is really the unemployment numbers," Uphoff said. "While we're an economy that's gaining a lot of momentum, it seems like we're having a little difficulty getting that to trickle down to the household level."

Adam Belz • 612-673-4405

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  • BY THE NUMBERS

    Job gains in July

    3,100 - in government, confined to local, non-education jobs

    2,100 - in trade, transportation, and utilities

    1,800 - in professional and business services, including accounting, legal, tech and business administrative positions

    1,300 - education and health services

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