State employers added 10,800 positions in November. Consumer spending for holiday season largely credited.
The biggest spike in holiday hiring in 10 years injected some cheer into Minnesota's monthly jobs report, as the state added 10,800 jobs in November.
Unemployment dropped to 5.7 percent, well below the national 7.7 percent rate.
Consumer spending drove the improvement. Stores and delivery companies boosted hiring to handle the holiday rush, according to figures released Thursday by the Minnesota Department of Employment and Economic Development.
"Not only are consumers spending ... but retailers this year, in contrast to the last few, are responding to that by actually hiring people," said Steve Hine, labor market economist for the state.
Holiday retail hiring happens at the end of every year, but this November's lift -- 9,323 new jobs -- was the largest in 10 years, according to state data.
Macy's has hired more than 1,800 people in Minnesota, the Dakotas and western Wisconsin, said Kamal Bosamia, a spokesman for the department store. Also pointing to the strength of consumer spending were hiring gains in leisure and hospitality, a category that's suffered most of the year. Restaurants, hotels and arts and recreation employers added 3,200 jobs in November.
But the trend in the state job market has been gradual, halting recovery, and economists expect that that is the best Minnesotans can hope for in early 2013.
"It's been a long, slow slog here," said Larry Wohl, who teaches economics at Gustavus Adolphus College. "I don't see any big signs that it's going to suddenly take off."
Many of the holiday retail jobs will be gone in January, and several leading indicators in the state are worrisome. The average workweek has shrunk each of the past two months after surging in September. The seasonally adjusted labor force participation rate -- the number of people either working or looking for work -- fell in November to 70.7 percent, its lowest level since 1983. That's a sign more people have given up looking for a job, or retired completely.
Online job postings have declined and unemployment insurance claims rose to their highest level so far this year, indicating layoffs have increased.
"To the extent that I do believe these are good solid leading indicators, they need to be taken into consideration," Hine said.
"It would not be surprising if that 10,000-, 11,000-job growth we've seen in two of the last three months softens a bit going into the early part of next year."
All the leading indicators go out the window, Hine said, if Congress and the White House do not avoid the so-called fiscal cliff. The automatic tax increases and spending cuts would likely trigger a second recession, the Congressional Budget Office has said.
"Even an agreement is going to have some contractionary impact going into next year," Hine said.
Better than nation as a whole
The overall job picture was bolstered by revisions showing Minnesota lost 3,300 fewer jobs in October than initially reported. The state has now gained 55,200 jobs in the past year and clawed back just a little more than 100,000 of the 156,300 jobs it lost in the recession.
Minnesota's job growth rate over the past year is 2.1 percent, beating the national rate of 1.4 percent.
Construction was again a bright spot in Minnesota in November. Employers hired 1,300 people in construction during the month, and such jobs have increased 5.4 percent over the past 12 months. Health care providers continued to hire, adding 3,200 jobs in the month.
The weakest sectors in November were professional, technical and scientific jobs, back-end business positions, durable goods manufacturing, publishing and telecommunications and local government.
"There just isn't enough demand out there," Wohl said, "to make this economy take off."
Adam Belz • 612-673-4405 Twitter: @adambelz