business

Minnesota's economy is starting to add jobs again.

The state gained 2,000 jobs in November, according to figures released Thursday that also contained a revision of October's results that showed twice as many jobs were created that month as originally thought.

"Compared to where we have been, this is just really good news. I am not ready to start singing 'Happy Days Are Here Again,' but it looks like we are headed in the right direction," said state economist Tom Stinson.

Slicing into the details of the report, experts found more to like.

For example, the average number of hours worked in a week also rose -- from 32.6 hours in October to 33.1 in November -- an early sign of a labor market trying to heal.

"It doesn't sound like a lot, but nine-tenths of an hour across 2.65 million jobs is about 2.5 million work hours per week or about 10 million work hours a month. That makes a big difference in the economy," said Dan McElroy, commissioner of the Minnesota Department of Employment and Economic Development.

The state unemployment rate fell 0.2 percent to 7.4 percent in November, DEED reported.

While things remain tough for the unemployed, that makes Minnesota's jobless rate 2.6 percentage points lower than the national rate of 10 percent.

"We haven't seen differences that large since about 1994," McElroy said.

Economists said they would not be too surprised to see state unemployment rise again in future months, but for an encouraging reason -- discouraged workers gaining new hope and reentering the workforce.

Gains in retail, highway construction and business service jobs were pivotal to November's improvement. DEED officials also revised their October job gain figures for the state from 2,200 to 5,000.

Minnesota's trade and transportation sector added 2,600 jobs during the month, the most in any sector. Professional and business services added 1,700, while construction added 1,200 jobs. McElroy said the construction gains largely came from highway, sewer and water system improvements, not new construction.

The state also saw the addition of 800 manufacturing jobs, 400 financial jobs and 200 logging/mining jobs.

However, state officials noted there are still six or seven job applicants for every job opening in Minnesota. For the month, state and local governments shed 2,400 jobs, education and health services shed 1,100, and information service firms cut 900. Leisure and hospitality jobs fell by 100.

The job declines were sobering, and clients heading to the state's 47 Workforce Centers in search of employment are still hard-pressed to find many opportunities. Compared with the 2,000 jobs the state added in November, it will likely take the return of 6,000 to 7,000 job gains each month before the jobless begin to feel conditions are improving, McElroy said.

"I'm optimistic about the positive trend of our employment data, but economic recovery is still in its early stages," he said, adding that a year ago, the state's unemployment rate was 6.1 percent.

In the past, Art Rolnick, former chief economist at the Federal Reserve Bank of Minneapolis, likened the shape of the national recession to a bathtub, noting the tough economy will bump along the bottom for a while before gradually recovering. Minnesota is no different.

In the past year the state lost 83,900 jobs or about 3 percent of its former job base. The places hit hardest were the Twin Cities, which lost 52,800 jobs, Duluth, which lost 5,000, St. Cloud, which lost 3,700, and Rochester, 700.

The state's manufacturing sector was the most punished, losing 36,500 workers as the housing market collapsed, causing severe downsizing at window and door, cabinet and tile makers. Minnesota currently has 2,650,000 jobs.

Stinson, the state economist, said Minnesota's job numbers "may be a little bumpy in December and January because of seasonal adjustment problems" including weak holiday hiring in December, lower-than-normal retail layoffs for January and weather-related construction weakness.

"But it looks like we are on track to consistently add jobs through March," Stinson said.

The Census Bureau is expected to add about 400,000 jobs to the economy in early 2010. That hiring, along with new federal stimulus spending, "will make sure that we get out of this slump.''

"It will give another little nudge to the economy in the first part of 2010," he said.

Dee DePass • 612-673-7725