Manufacturing and health care added nearly 10,000 jobs in the early fall.
In a long-awaited glimpse into the Minnesota job market, a surprise spike in factory hiring and reliable growth in health care helped drive down the state’s unemployment rate to 4.8 percent, its lowest level since before the start of the Great Recession.
Employers in Minnesota added a modest 1,200 jobs over the past two months — shedding 8,700 jobs in September, then adding 9,900 positions in October, the Department of Employment and Economic Development reported Thursday.
But Minnesota has gained more than 34,000 jobs this year and more than 50,000 since October 2012.
“That’s good growth,” said Tom Stinson, an economist at the University of Minnesota. “There’s nothing wrong with what’s going on here.”
Minnesotans had to wait more than two months for the September and October jobs reports because the government shutdown in Washington, D.C., slowed the compilation of federal data that’s used to calculate the state results.
Minnesota’s jobless rate hasn’t been as low as 4.8 percent since a two-month period spanning December 2007 and January 2008, when the recession was just beginning. The rate remains significantly lower than the national average of 7.3 percent, a sign of the relative economic strength of the Upper Midwest. As of Sept. 1, four of the eight states with jobless rates below 5 percent were in the Midwest, North Dakota, South Dakota, Nebraska and Iowa.
Economists say the Minnesota unemployment rate is dropping in part because fewer people are trying to work.
The labor force participation rate — the percentage of the working-age population holding a job or looking for a job — fell in October to 70.1 percent, its lowest level since 1980.
The decline is due mostly to the aging of Minnesota workers, said Steve Hine, the state’s labor market economist. It’s not, as many have argued, a result of large numbers of Minnesotans giving up on job searches, he said.
“A lot of this is demographics,” Hine said. “We have state data on discouraged and marginally attached workers, and that factor doesn’t seem to be playing a big role.”
Since the labor force shows little sign of growing, Minnesota’s jobless rate will likely continue to fall, Hine said. “This is going to continue to occur in the coming 10 years or more.”
Across the state, the biggest job gainers in the early fall were manufacturing, which added 5,300 jobs, and health care, which added 4,300.
Health care has been creating jobs steadily through the recession and recovery, but factories had been shedding jobs for about a year, so the spike in manufacturing hiring was a welcome reversal.
Bob Kill, president of the manufacturers’ consulting firm Enterprise Minnesota, said factory managers have been slow to hire because of lingering uncertainty about the economy and the political battles in Washington. But companies in Minnesota and the Upper Midwest increasingly have an advantage over international competitors because they can deliver quality parts quickly, and managers are getting more comfortable with some uncertainties.
“At some point you have to start hiring to grow your business,” Kill said.
The food industry helped drive growth in manufacturing jobs, said Hine, though October hiring may have been boosted by a late harvest.
“Ag and food processing has been really solid, and it hasn’t slowed down,” Kill said. “We’re blessed to have a pretty diverse manufacturing base here — as I always say, from tractor parts to things you need a microscope to see in medical devices.”