Minnesota’s unemployment rate fell to a five-year low, but that was partly because more people stopped looking for work.
Minnesota’s job market has hit the summer doldrums.
The state’s employers added only 400 new positions last month, after a gain of more than 10,000 in May, the state reported Thursday. Unemployment ticked down to 5.2 percent, a five-year low, but that was partly because more people gave up on the job hunt and weren’t included in the numbers.
“Certainly a slight gain of only 400 jobs was disappointing,” said Steve Hine, labor market economist for the Minnesota Department of Employment and Economic Development. “But the data do continue to suggest that conditions are ripe for continued improvement in the coming months.”
The state’s unemployment rate fell to its lowest point since May 2008, well below the national average of 7.6 percent. In the Upper Midwest, Minnesota’s jobless rate is about halfway between the low rates in North Dakota, South Dakota and Iowa, and higher joblessness in Wisconsin and Illinois.
The brightest area of hiring in the state was temporary help, which set an all-time high at 68,200 jobs. Employment services, a category that was only introduced in 2000, is growing everywhere.
“We started to see a relatively steep increase starting in April, and going through the summer we have seen an incredible amount of temporary job orders,” said Anne Edmunds, a regional vice president for Manpower Inc. whose area includes Minneapolis-St. Paul and Chicago.
Overall, a solid gain of 2,500 jobs in Minnesota’s private sector in June was offset by the loss of 2,100 government jobs, in large part because state universities slow down in the summer, Hine said.
Employers cut jobs in construction, finance, manufacturing, professional, scientific and technical positions and even health care.
Unemployment fell despite the paltry job gains because the state’s labor force participation rate, the number of people who could work who are either working or looking for a job, fell slightly in June. The government doesn’t count people who aren’t looking for a job as unemployed.
Manufacturing jobs have now declined by 1,400 positions in the past 12 months, the state reported.
“That has certainly re-emerged as an area of concern,” Hine said.
Another concern is the slow growth of jobs in the state’s smaller metro areas — particularly Mankato, Rochester and Duluth. Job growth in those three cities was less than 1 percent over the past 12 months.
In June, the state announced that May’s figures had been revised upward, from 8,400 jobs added to 10,300. The monthly jobs report is based on surveys and usually revised.
“I think it’s a good report,” said Tom Stinson, an economist at the University of Minnesota. “There’s not a big increase in employment or the number of jobs for the month, but historically May and June are tough months to analyze.”
Stinson said weather and the end of school always affect June, and the number will likely be revised. Taken together with the strong May numbers and an increase in the length of the average workweek, it’s been a good two-month stretch for Minnesota.
“If you come out of June in pretty good shape,” Stinson said, “that’s what you like to see.”
Adam Belz • 612-673-4405 Twitter: @adambelz