Minnesota employers added 4,300 jobs in July, as gains in public education, health care and finance overcame continued losses in construction and manufacturing.

The unemployment rate was unmoved at 5.2 percent, but is still well below the national average of 7.4 percent, the Minnesota Department of Employment and Economic Development reported Thursday.

The state has been adding an average of just under 5,000 jobs in each of the past three months.

"If you have 12 months like that, that's 60,000 jobs. That's a good year," said Tom Stinson, an economist at the University of Minnesota. "I'd like to see the unemployment rate come down a little bit more, but the jobs numbers are comforting."

The state is now one strong month away from returning to the all-time employment high set in February 2008, before the recession eliminated 160,000 Minnesota jobs.

The strongest job sector in July was local government, which added 3,800 jobs, mostly at public schools. Hiring at school districts is up 10 percent from a year ago, a gain of about 10,000 jobs.

Evan Ramstad — Bloomberg, Star Tribune
Minnesota's jobless rate held steady in July as the state added 4,300 jobs.

Oriane Casale, a labor market economist for the state, attributed that to growing summer school programs and the boost in education funding approved by the state Legislature this spring.

"Definitely one of the things going on here seems to be additional funding for hiring at the local government level, and specifically in school districts," Casale said.

Health care and financial activities each added 1,600 jobs on the month, and leisure and hospitality added 2,200.

Construction, however, shed 1,700 jobs, and private education lost 4,200 jobs. Manufacturing, which lost 1,400 jobs, has now shed 4,800 jobs in the past six months.

"Manufacturing continues to be the glaring weak spot," Casale said.

The average workweek in Minnesota declined by eight-tenths of an hour, giving up gains from a month earlier, and labor force participation fell by three-tenths of a point to 70.5 percent.

That's the lowest level since 1983, with the decline in recent years driven by a combination of baby boomer retirement and discouraged workers giving up on job searches.

"Some of the decline in the labor force participation rate was definitely due to a bad job market, and it probably still is," Casale said. "The fact that the unemployment rate is relatively low, the job market is relatively good, and we're still seeing this decline in labor force participation is definitely indicating that age demographics are driving it."

The decline in construction hiring may also be less alarming than it appears, Stinson said. While companies are not hiring as many construction workers as they were six years ago, plenty of work is being done by independent contractors whose work is not reflected in the jobs report.

While the state added jobs in July, the numbers for June were revised downward, from 400 gained to 1,000 jobs lost. The state has gained a non-seasonally-adjusted 71,500 jobs since July 2012, a growth rate of 2.6 percent, compared with a U.S. growth rate of 1.7 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.

With July's gains, Minnesota is within 5,500 jobs of clawing back all the positions it lost in the recession.

"We're going to break through," Stinson said. "We've come back almost all the way."

Adam Belz • 612-673-4405 Twitter: @adambelz