MInnesota job market 'looking sickly'

  • Article by: MIKE MEYERS , Star Tribune
  • Updated: March 20, 2008 - 9:06 PM

Five of 11 industries in Minnesota shed jobs in February and unemployment rose in the latest signs of a weakening economy.

Minnesota lost 4,100 nonfarm jobs in February, the latest month to show evidence of a weakening state economy.

In the last 12 months, with a labor force of more than 2.9 million people, Minnesota created just 12,500 jobs.

"The labor market in Minnesota is obviously looking sickly," said Scott Anderson, senior economist at Wells Fargo & Co. "It's pretty consistent with a recessionary environment."

Five of 11 Minnesota industries lost jobs in February. Four gained and two held steady.

Meanwhile, the unemployment rate inched ahead to 4.6 percent, up from 4.5 percent in January, according to the Minnesota Department of Employment and Economic Development (DEED).

"The areas of weakness are more prevalent than where we've seen improvement," said Steve Hine, DEED director of labor market information. The chief job declines were in trade, transport and utilities (down 2,700 jobs) and construction (down 2,000).

Only "other services," a catchall category, posted a four-figure job gain from January to February. That sector added 1,000 jobs.

More striking, in the last two years, one in every four jobs in Minnesota residential construction has vanished -- from 16,703 people to 12,326.

Toby Madden, regional economist at the Federal Reserve Bank of Minneapolis, described the latest jobs report as sluggish, but far short of alarming.

"The economy is not tanking," he said. "The job losses aren't huge."

A bellwether economic yardstick sent a more troubling signal, however. February was the third month in a row of decline in the Minnesota Labor Market Index, a measure of wages, factory hours and adjusted weekly initial unemployment claims.

"Minnesota's index has historically decreased for three or more consecutive months right before or within a couple of months of the onset of past national recessions," DEED said in a statement.

The index isn't infallible, however. The last time the index dropped for three consecutive months, in 2005, no recession was on the horizon.

"It was a weak month," said Hine at DEED.

Unemployment insurance claims rose 75 percent in February from January, on a seasonally adjusted basis, DEED said. In a separate report, the agency estimated that Minnesota, in the last three months of 2007, had 2.5 unemployed workers for every job vacancy across the state.

"Minnesota continues to feel the effects of a sluggish national economy, related to the downturn in housing and tight credit markets," DEED Commissioner Dan McElroy said in a statement.

"However, there are bright spots in our economy, including businesses in a number of industries that continue to seek talented workers and make investments for the future," he said.

Mike Meyers • 612-673-1746

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

 
Close