Minnesota gains 5,900 jobs

  • Article by: ADAM BELZ , Star Tribune
  • Updated: October 19, 2012 - 6:14 AM

The improvement echoed national gains. An increase in the workweek was also good news.

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Miguel Bobadilla filled out employment information during an NAACP job fair in Minneapolis last month.

Photo: Kyndell Harkness, Star Tribune

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Minnesota gained 5,900 jobs in September, pushing the unemployment rate down one-tenth of a percentage point as state job growth echoed positive national economic news in recent weeks.

It was the second-best month for job creation this year, according to the Minnesota Department of Employment and Economic Development, which also revised the August job figures -- from a loss of 2,000 jobs to a loss of 700.

Steve Hine, labor market economist for the department, called Thursday's report "really some fairly decent news." Unemployment ticked down to 5.8 percent, and the labor force grew by 3,000 people. That's a small gain, but it's the largest in the past 18 months.

In a particularly encouraging sign, Hine said, Minnesotans are working more hours. The average workweek grew from 33.7 hours in August to 34.3 hours in September, the biggest gain since the state began tracking the figure in 2008.

"It doesn't sound like much, but that increase in the average workweek would translate into the equivalent of over 40,000 additional jobs," Hine said. "It's typically seen as a leading indicator. Employers ask their workers to work more hours before they turn around and hire someone new."

The report is the latest in a string of positive reports about the economy. The national unemployment rate fell to 7.8 percent in September, its lowest point since January 2009. National retail sales were up 5.4 percent year-over-year in September and housing starts were up 15 percent, signs that consumer spending and the housing market -- both critical to the American economy -- may be turning a corner.

Minnesota's economy has now recovered almost 90,000 jobs -- 57 percent of the jobs lost in the recession.

Martha Paas, who teaches economics at Carleton College in Northfield, Minn., said that while the recovery would be faster had there been a second stimulus bill, the September report is encouraging.

"It's on track and should give people a lot of confidence that the thing is going to resolve itself pretty soon," Paas said.

The private education and health care sectors in Minnesota led the charge, adding 5,600 jobs. Private schools and colleges boosted hiring after a particularly tepid summer, Hine said. Jobs in health care -- which account for 15 percent of employment in the state -- have been largely safe and growing through the recession and recovery.

Leisure and hospitality added 3,300 jobs and construction added 1,500.

Other job gains in the state were spread among several sectors.

Growing employment in construction reflects Wednesday's encouraging news on housing construction, Hine said, with housing starts nationwide up 15 percent. Jobs for specialty building contractors in Minnesota have risen 12 percent in the past year.

"We're seeing signs that the housing market improvement is translating into strong growth," Hine said.

The weak spots in the state were government and manufacturing. Government employment, including public schools and universities, fell by 3,600 in the month, giving back about half of the gains made in August.

Manufacturing, which added jobs steadily from March to July, had its second straight month of losses, shedding 2,500 jobs. The number of jobs in manufacturing has fallen since January by 1,600.

Agapitos Papagapitos, who teaches economics at the University of St. Thomas, pointed out that each month's job numbers are revised, and the positive job figures in September could partially reflect deficiencies in the way numbers are seasonally adjusted. For instance, students who return to school earlier may give up their job in August instead of September, hurting August's numbers and boosting September's.

The labor market is improving, Papagapitos said, but probably not as dramatically as it appears to have risen in September.

"Let's wait and see if these numbers actually get revised, and let's wait and see if they constitute a pattern," he said.

Adam Belz • 612-673-4405

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