Waiting for the Minnesota job market to improve? Find a comfortable chair.
The U.S. job market will continue to deteriorate well into 2009, likely taking the Minnesota labor market with it, according to the latest forecast of the Conference Board, a New York City-based business think tank.
"We're just mired in a slow-growth economy right now," said Minnesota state economist Tom Stinson.
So far this year, instead of gaining 2,700 jobs a month -- the number needed to provide jobs to the ranks of people entering the job market -- Minnesota has been losing 2,700 jobs a month.
The state unemployment rate hit 5.8 percent last month. It was 5.7 percent nationwide.
"There isn't any reason to think Minnesota is going to buck the national trend," Stinson said. "We may do a little better some months but we'll probably do a little worse in other months and, more or less, track the national averages."
Steve Hine, labor market information director at the Minnesota Department of Employment and Economic Development, shares the gloomy opinion of what lies ahead for state and national job markets.
"We've been seeing an average monthly job loss over the last six months that's greater than the nation," Hine said about Minnesota's job picture.
Initial claims for unemployment insurance have been rising and demand for temp services -- the usual precursor to a turnaround in corporate hiring -- has been on the decline, Hine noted.
"I don't see anything in our data that suggests we're going to turn the corner on this downturn any earlier than the nation as a whole," he said.
The Conference Board released its latest Employment Trends Index this week, showing another slide in August, which was down 8 percent from a year ago.
"The pace of decline points toward job losses and rising unemployment extending well into 2009," said Gad Levanon, Conference Board senior economist.
"The reason I'm not very optimistic: The employment trend index keeps deteriorating," Levanon said. "I don't think there will be a recovery in the labor market as long as the economy is growing very slowly or not growing at all."
While the Conference Board index doesn't track Minnesota separately, Levanon said, "I don't see a reason to be optimistic about most parts of the country."
The Conference Board conclusions about the job outlook are in line with the computer forecasts of the Federal Reserve Bank of Minneapolis, said Toby Madden, the Fed's regional economist.
"The economic outlook for Minnesota and the nation is not as favorable as we'd like," Madden said. The Minneapolis Fed forecasts calls for a 0.1 percent decline in Minnesota jobs next year.
If so, the state's employment -- today at 2.7 million -- would be down 2,700 jobs at the end of 2009, rather than adding more than 30,000 over the year, the pace of more typical times.
"What I'm seeing right now is quite a slowdown in employment in pretty much every sector of the economy," said Ed Kashmarek, economist at Wells Fargo & Co. in Minneapolis.
Looking at Minneapolis job figures, he noted that even past job growth leaders, such as education and health, have faded.
"Even the strong part of the economy is wilted," Kashmarek said.
Mike Meyers • 612-673-1746
