Minnesota jobless rate drops to 4.6%

  • Article by: ADAM BELZ , Star Tribune
  • Updated: December 19, 2013 - 9:27 PM

Minnesota’s private employers continued to add more workers.

Minnesota’s private sector added 2,400 jobs in November and the state’s unemployment rate fell to 4.6 percent, the lowest it’s been since the summer of 2007.

Finance, certain types of software and Web development, real estate, transportation and warehousing all posted modest seasonally adjusted gains on the month, according to data released Thursday by the Minnesota Department of Employment and Economic Development. But jobs were cut in retail, back-end business positions, hotels, restaurants, health care and government.

November’s data offered a puzzling snapshot of the job market. Job growth over the past 12 months has been steady, but overall Minnesota shed 800 jobs in November, entirely because of the loss of 3,500 jobs in local government.

“We’ll see what the revision looks like,” said Steve Hine, the state labor market economist.

The average workweek in Minnesota, a leading indicator for hiring, held steady at 33.7 hours, and employers posted 9,500 new jobs online, Hine said. Another leading indicator, the number of temporary jobs, fell by 3,000 in November.

“The labor market continues to show steady improvement, with the number of unemployed Minnesotans now below pre-recessionary levels,” said Katie Clark Sieben, commissioner of the Minnesota Department of Employment and Economic Development.

Minnesota has added 40,400 jobs in the past 12 months, a rate of growth that, at 1.5 percent, is slightly lower than U.S. growth of 1.7 percent.

A bright spot this fall in Minnesota has been manufacturing, which has added 5,800 jobs since August, and ticked upward again in November. Manufacturing employment, which economists and policymakers view as providing a key middle-class sector, still is negative compared with a year ago, but appears to have stabilized after steady declines through the spring and summer.

Construction also added jobs in November, and has added 4,200 positions over the past 12 months.

The state’s unemployment rate fell from 4.8 percent to 4.6 percent, well below the U.S. rate of 7 percent.

States in the Upper Midwest like North Dakota, South Dakota, Nebraska and Iowa all have unemployment rates below 5 percent as well. North Dakota’s October jobless rate was 2.7 percent. Wisconsin’s was 6.5 percent.

More retirees

Minnesota’s jobless rate continues to fall in part because more Minnesotans are retiring and leaving the workforce, and in part because the rate reflects employment gains over several months, not just the tepid gains in November.

“The unemployment rate is really now just catching up to the strength that our employment numbers have revealed over the past six months,” Hine said.

The November data showed that fewer people are looking for work. The state’s labor force participation rate — the percentage of the working-age population that is either working or looking for a job — ticked downward to 70 percent, its lowest level since November 1980.

That’s because 58,000 people retired and started collecting Social Security in Minnesota between 2009 and 2012, said Hine, who has pointed out over the year that the numbers of “discouraged workers” who have dropped out of the labor force because they can’t find work is lower in Minnesota than elsewhere in the country.

“It is very clearly the case that this declining participation rate is being driven by increasing retirement rates as us baby boomers all get older,” Hine said.

The overall November loss of 800 jobs was offset by an upward revision of 1,000 jobs in October. Private-sector employment in Minnesota not only climbed by 2,400 in November, but was revised upward by another 2,300 jobs for October.

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