Minnesota hiring continues to gain momentum

  • Article by: ADAM BELZ , Star Tribune
  • Updated: March 22, 2013 - 5:45 AM

State added 14,500 positions last month. Jobless rate steady at 5.5%.

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Job fair in Minneapolis

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February capped the strongest six-month streak of job gains in Minnesota in nearly 30 years, defying fears that federal budget gridlock and a round of across-the-board spending cuts would undermine business confidence and discourage hiring.

The state’s employers added 14,500 jobs last month and 28,000 positions in the first two months of the year, while the unemployment rate stayed at a better-than-the-nation 5.5 percent, according to figures released Thursday by the Minnesota Department of Employment and Economic Development.

Minnesota has added 50,800 jobs since the end of August, the largest half-year gain since 1984. The state has now clawed back all but 1,000 of the 156,000 jobs it lost in the recession, and the remaining deficit consists of jobs in government.

“We seem to have picked up a head of steam here, an upward momentum in our job growth that appears to be substantial enough that we’re able to weather the headwinds that our Congress is throwing at us,” said Steve Hine, a state labor market economist.

The United States as a whole has regained about two-thirds of the jobs it lost in the recession.

Minnesota’s biggest February gains were in professional and business services, a broad category that includes law, engineering, temporary help, computer and software-related jobs, accounting, architecture and management.

The sector added 6,800 jobs on the month, which bodes well for the larger economy, Hine said.

“Their employment depends on how well businesses are doing in manufacturing and health care and other areas,” Hine said. “Within that sector, the temp help component is probably the most indicative of other businesses’ labor needs.”

Minnesota outpaces national averages — with unemployment far lower than the U.S. rate of 7.7 percent.

It has also emerged as a dividing line between the economic vigor of the northern Great Plains and the continued struggles of Great Lakes states to the east.

In January, the most recent month for which data is available, Wisconsin’s unemployment rate was 7 percent, Illinois’ was 9 percent and Michigan’s was 8.9 percent.

To the south and west, Iowa’s rate was 5 percent, South Dakota’s was 4.4 percent and North Dakota’s was 3.3 percent.

“It strikes me how heterogeneous the U.S. economy is,” said Pete Ferderer, an economist at Macalester College. “In a perfect world, unemployment rates would be pretty equal across states.”

But they’re not, perhaps reflecting the fact that many people can’t easily relocate to states with better work opportunities.

More than one in five mortgages across the country is still underwater, Ferderer said, so unemployment rates aren’t equalizing across regions of the country the way they did during economic recoveries before the Great Recession.

“People are more willing to hang in there than pack up the U-Haul,” Ferderer said.

The hiring outlook in Minnesota has improved despite concerns over the so-called fiscal cliff and across-the-board federal spending cuts that went into effect March 1. Ferderer believes the magnitude of the impact of Washington gridlock has been overstated.

In Minnesota, specifically, the spending cuts will not cause severe harm.

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