The latest reading on the Minnesota labor market will come this morning, with the state's employment report for October.
Expect the fourth month in a row of employment declines -- a trend state job trackers say will likely push through next year and into early 2010.
The state is on a path to lose some 55,000 jobs, comparable to the period during and after the 2001 recession. Before it's over, Minnesota is set lose the equivalent of all the jobs gained in the past three years.
"We're absolutely starting in a relatively weak position," said Steve Hine, director of labor market information at the Minnesota Department of Employment and Economic Development (DEED).
"Since we started this downturn with more slack [higher unemployment rate and levels] than we did in 2001, it would take a stronger turnaround and presumably more time to retain full employment," Hine said.
After the last recession, the Minnesota job market grew so slowly that returning to its pre-slump employment level took 51 months, more than twice the average two-year recovery after nine postwar economic downturns.
Minnesota's labor market took two more months than the national average to fully recover losses sustained during the last recession. After the 1990-91 recession, Minnesota's job market sprang back to previous levels in 11 months, one-third the time it took the nation to do so.
The previous state jobs-recovery record was 38 months, in the sluggish growth that followed the 1981-82 recession.
This time, Minnesota may not see the peak levels of jobs it achieved in March until well into the second decade of the 21st century.
"What we're looking forward to in Minnesota is another full year of job losses," said Scott Anderson, senior economist at the Minneapolis office of Wells Fargo. "I think we're looking at five years -- at least -- to get back to where we were."
But Minnesota's state economist has a slightly different view, one that passes for optimism in the face of a deteriorating state job market.
"The duration of the decline is likely to be longer. You still could have more than four years from [job] peak to peak," Stinson said. "It's more likely the slide will be longer and the recovery period will be a little shorter."
The reason, in Stinson's view: The last recovery in state jobs dragged on for more than four years, in large measure because of economic uncertainties in the long run up to the 2003 U.S. invasion of Iraq.
Projections vary
When the Minnesota job market does start to grow, whether in 2009 or 2010, Stinson believes it may grow faster than in recent years.
"Assuming we don't have another geopolitical incident we have to deal with, that may allow things to go a little better," he said.
Preliminary results from the economic forecasting model of the Federal Reserve Bank of Minneapolis are more optimistic than the DEED forecast -- 30,000 job losses from the third quarter 2008 to third quarter 2009.
The Minneapolis Fed model foresees 11,000 jobs disappearing across the state next year. But Toby Madden, Minneapolis Fed regional economist, said the forecast isn't finished and may change as new economic data are released in the days ahead.
"That will depend a lot not only on projections for the economy but what will happen to population growth," Madden said.
In the 1990s, the state's population growth surged as people migrated to Minnesota from other locales in search of jobs in a hot labor market.
"Unfortunately, the outlook for the next year isn't good for Minnesota," Madden said.
Adding to the uncertainty is the nature of state and national economic troubles. In past recoveries, robust consumer spending and a strong upturn in housing starts led Minnesota and the rest of the country out of slumps. These days, few economists foresee a resurgence in housing starts and consumer spending.
Mike Meyers • 612-673-1746
