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State adds workers, but jobless rate rises
Some laid-off Minnesotans have resumed job searches, which is a positive sign.
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Minnesota employers added 2,200 temporary and permanent jobs in October, prompting some discouraged workers to re-enter the labor force and resume job searches. The result nudged October's unemployment rate to 7.6 percent from September's revised rate of 7.4 percent.
The slight uptick ends three straight months of declines in the state unemployment rate, but is a significant improvement from June's rate of 8.4 percent and October's national rate of 10.2 percent.
Minnesota had 2,645,000 workers in October, up 2,200 from September. Overall nonfarm employment fell over the preceding 12 months by 100,500 jobs.
For October the state lost jobs in trade, transportation and utilities (4,900 jobs), manufacturing (4,500), construction (1,200) and "other services" (300). At the same time, it gained 5,500 jobs in professional and business services, 3,700 in education and health, 1,700 in leisure and hospitality, 1,600 in government, 300 in information services and 200 in financial services. Logging and mining remained flat.
State officials singled out economic improvements reported by some medical device, food processing and health care companies as well as by certain segments of financial firms.
Of the 5,500 professional and business jobs added during the month, 3,200 were temp jobs. A rise in temporary hiring is often a key signal that a recession is working its way to an end, economists said.
Dan McElroy, commissioner of Minnesota's Department of Employment and Economic Development (DEED), said the recovery from the 2002 recession began with an uptick in temporary jobs. So far this year, August and September have shown solid growth in the number of temp jobs, rising a respective 2,100 and 1,300.
October's temporary-job gains are also seen as a positive sign, but the month's overall results elicited subdued hope and caution.
"We have seen improvement in our unemployment rate, but even with that we are still at nearly 224,000 unemployed Minnesotans," said Steve Hine, the state's director of labor market information. "It's quite a different thing to say that conditions are starting to show signs of improvement versus that conditions are now strong."
McElroy agreed. "I don't think we have overwhelmingly fabulous news other than some components of health care. But various sectors have held up as a whole fairly nicely."
He said job gains together with an increased jobless rate are "consistent with what economists often expect at the turning point of a recession." The re-entry of previously discouraged workers into the job market often creates such mixed results, he said.
But he called October's job growth in six industry sectors "a positive sign" and said the widening gap between the state's and nation's unemployment rates "is also noteworthy."
McElroy credited the differences between the state and national jobless rates to Minnesota's diverse economy. He and Hine noted, however, that Minnesota entered the recession about six months earlier than the rest of the nation because of its large housing, lumber, window and logging industries. Those industries were felled by the downturn in the housing market. Minnesota's early entrance into recession may explain why it's seeing improvements sooner than the rest of the nation.
Federal stimulus moneys are believed to have helped Minnesota's economy somewhat with new money for wastewater treatment and transportation projects. But the overall impact is not fully known, McElroy said.
The late start to the school year and a unseasonably cold and wet October affected construction hiring and prompted late employment reporting from schools. Late reporting and employment shifts by schools and nonfarm businesses affected by a warm September prompted revisions to September's unemployment rate from the previously reported 7.3 percent to 7.4 percent -- a much better revision than some had feared.
Economists warn that the country and various states still have a long way to go before any economic recovery is felt by job seekers. On a year-over-year basis Minnesota lost 100,500 jobs, including 41,300 in manufacturing; 25,400 from professional/business firms, and 22,700 from trade, transportation and utilities firms. Construction jobs fell by 13,700 workers, while education and health care firms shed 11,700 jobs.
State officials are encouraging job seekers to visit one of the 47 workforce centers across the state and noted that there are job counselors available and lists of employers looking to add staff.
Dee DePass • 612-673-7725
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