Minnesota: Slow progress on jobs front

  • Article by: DEE DEPASS , Star Tribune
  • Updated: May 20, 2010 - 9:02 PM

Minnesota added 10,200 jobs in April, lowering the jobless rate to 7.2 percent.

The Minnesota job market is distancing itself from the national picture.

While the state's job recovery remains a work in progress, Minnesota employers added 10,200 jobs to the state's economy in April, bringing the unemployment rate down to 7.2 percent. In contrast, the national jobless rate rose to 9.9 percent in April from 9.7 percent.

That spread of 2.7 percentage points is the largest gap between Minnesota and national jobless rates in the 34 years that the two have been compared each month.

"We are headed in the right direction," said Dan McElroy, commissioner of the Minnesota Department of Employment and Economic Development.

McElroy and state labor market director Steve Hine sounded notes of caution, however. McElroy said that even if the state gained 10,000 jobs every month, it would still take at least 18 months to fully recover the jobs lost in the recession. Minnesota's jobless rates ran closer to 4 percent before the start of the downturn.

Hine said the state still has 214,000 unemployed Minnesotans, the highest number on record. During the 1982 recession, Minnesota lost about 190,000 jobs, Hine said.

"The signs continue to be somewhat encouraging, but I am cautious. We have yet to put together that three consecutive months of job growth that I'd been hoping for." McElroy said.

Six of Minnesota's 11 main sectors added jobs last month. After a rocky year, the retail sector, which falls under the category of trade, transportation and utilities, added 5,700 jobs.

Strength in retail

The continued strength in retail trade is "another important indicator," Hine said. It "points toward some consumer spending, which is a necessary ingredient of a sustained and strong recovery."

The beleaguered manufacturing sector added jobs for the fourth consecutive month. That comeback is "quite impressive after having lost jobs for as long as it did," Hine said. Recent gains have been "fairly substantial. ... Over the last four months manufacturing has added 7,800 jobs."

The sector shed 8,100 workers year over year and an estimated 50,000 during the past few years, industry observers said.

"What [factories] are doing is hiring back their favorite people, those who were loyal and dedicated that they had the misfortune of laying off during the lean times,'' said Fred Zimmerman, a manufacturing expert and University of St. Thomas professor emeritus. "They are probably doing some new hiring, but not all that much yet. Most of the manufacturers I talk to are seeing some gradual uptick in business. But the clouds surrounding the euro, the fun and games on Wall Street and the budget shortfalls of the state and the nation [are] fairly serious ... and create an additional level of uncertainly."

The state added 2,200 government jobs in April, while the education and health care sector added 1,600; leisure and hospitality added 700; and information added 300. Logging and mining remained unchanged for the second month in a row.

Construction reported a seasonally adjusted loss of 100 jobs for the month. But Hine noted that unadjusted raw numbers showed "signs of strength" with significant job gains. The models used to seasonally adjust construction job figures may have been distorted since they are normally predicated on trends. Yet the depressed construction trades haven't reflected normal trends for months, he said.

Three other sectors showing job losses were "other services" (down 900), financial activities (down 500) and professional/business services (down 300).

Dee DePass • 612-673-7725

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