Fearful consumers pinched pennies from the shopping malls to the auto malls last month, costing thousands of Minnesota jobs and nearly eliminating the holiday hiring bump.
Bracing for the weakest holiday sales in years, Minnesota retailers added just 107 jobs last month -- the smallest hiring commitment for an October since the state began keeping records on the sector in 1990.
Workers fared even worse at the state's auto dealerships, which shed 2,000 jobs -- one in every 17 positions -- marking the largest monthly drop on record.
"We're in a recession. The car dealers are in a depression," said Scott Anderson, senior economist at the Minneapolis office of Wells Fargo & Co.
As the economy slid deeper in the hole last month, 7,500 Minnesota jobs vanished. That brings the year's job losses to 25,900, effectively wiping out the gains of the previous two years.
October was the fourth month in a row the state has lost jobs. The seasonally adjusted state unemployment rate last month inched up a tenth of a point, to 6 percent.
The U.S. unemployment rate stood at 6.5 percent last month.
"We're looking at one of the worst recessions for the state of Minnesota since the early 1980s," Anderson said. "I think we easily could see Minnesota's unemployment rate rise to 7.5 percent or so by late next year."
Disappointing, not surprising
In sheer numbers of unemployed, Minnesota's job market already looks worse than it did during and after the 2001 recession, according to an analysis by the Minnesota Department of Employment and Economic Development (DEED). In November of that year, the state was home to 124,000 unemployed. As of last month, more than 175,000 people across Minnesota were out of work.
"Today's numbers are very disappointing but not surprising," Minnesota state economist Tom Stinson said.
"This is just another sign that the national economic recession is alive and well in Minnesota."
Trade, transportation and utilities dropped 4,800 jobs in the state last month. Manufacturing lost 2,000 positions -- the eighth decline in that sector in the past nine months. Construction fell by 1,900 jobs, and professional and business services (dominated by temp agencies) shed 1,100 spots.
Since the employment peak in early 2006, one in every six construction jobs has disappeared from Minnesota. In residential construction, one in three jobs has gone in the past four years.
Only three employment sectors remained positive: Education and health services added 1,700 jobs, leisure and hospitality gained 1,000, and government grew by 700 positions.
New claims for state unemployment insurance in October rose by 3,400 -- a 13.3 percent gain.
That brought the number of people collecting unemployment to more than 29,000 -- the highest level since October 2001 "when the travel industry and other sectors were reeling from the events of Sept. 11," DEED noted.
"The number of people drawing unemployment benefits during October was 27.5 percent higher than the previous October, and the number of people exhausting their benefits before finding employment was up 31 percent over the same month last year," Steve Hine, DEED's labor market information director, said in an analysis.
There's no place to run, either. On Thursday, the government said that the number of new weekly claims for U.S. jobless benefits hit a 16-year high, suggesting that keeping and finding a job is likely to remain tough in the coming months.
Mike Meyers • 612-673-1746
The S&P 500 index fell to its lowest close since April 1997, and the Dow hit its lowest since March 2003. D3