Minnesota’s economy gained 9,500 jobs in December, as hiring in retail and manufacturing propelled the state job market to its second-best year since 2005.
Including a revision of the November figures that added 1,700 jobs, total employment in the state grew by 45,900 positions in 2013, according to data released Thursday by the Minnesota Department of Employment and Economic Development. The unemployment rate held steady at 4.6 percent, well below the national rate of 6.7 percent.
“The December report is positive for Minnesota’s jobs picture, and that’s despite disappointing reports nationally,” said Laura Kalambokidis, the state economist. “Minnesota isn’t marching lock step with the national jobs report.”
All the metro areas in the state saw job gains over the past 12 months, though 77 percent of total growth — 35,200 jobs — came in the Twin Cities. The state now has 16,000 more jobs than it did at its prerecession peak.
Leading indicators for the job market are also strong, said Steve Hine, labor market economist for the state. The average workweek rose to 34 hours, only the fourth time it’s been that high and the first time ever in the winter. Online job postings jumped by 6,100 in December.
“We can expect a continuation of job gains, at least into early 2014,” Hine said.
Retail hiring, seasonally adjusted to account for holiday fluctuations, was the big gainer for the month in Minnesota. Stores and shops added 4,900 jobs in a better-than-usual December, more than half of the state’s net job gains.
Despite ongoing challenges at Best Buy and this week’s corporate layoffs at Target, retailers in general must keep hiring people for their stores to maintain one of their few advantages over online merchants like Amazon, said Doug Hermanson, a senior economist at Kantar Retail.
“A lot of these retailers are still in the position where what they have to offer most is customer service,” Hermanson said. “So at this point it doesn’t make sense for them to start cutting back on that, given you’re really then losing a lot of your best advantage against online competition.”
Good news, bad news
Nationally, retailers added 72,000 jobs in December, the best final month of the year for retail hiring since 2008.
However, the state’s most recent data show that three of every five available jobs in retail is part time, and the median wage offer for all retail jobs is $8.79 per hour.
The number of Minnesotans employed in higher-paid professional, scientific and technical jobs declined in 2013 by 700.
Temporary hiring grew by 7 percent in 2013, much faster than hiring overall, with almost 67,000 Minnesotans working for temp agencies. Nearly 40,000 Minnesotans have been unemployed for more than six months. And the Minnesota Department of Labor and Industry reported Thursday that 83,000 Minnesota hourly workers are paid the federal minimum wage of $7.25 an hour or less, a share of hourly employees that’s declining but still well above prerecession levels.
In December, jobs were added in local government, which gained 1,800 jobs, and in manufacturing, which added 1,700. Private education added 1,000 jobs, and 1,600 jobs were added in administrative support and waste services, a category that includes everything from back-end business jobs to temp and janitorial work.
Over the course of the year, 11 of the 12 major job categories posted gains in Minnesota.
“One of the things that’s encouraging about the year is that there have been gains in most industries,” Kalambokidis said. “Manufacturing is an exception, and it’s an important one.”
Manufacturing, the lone sector to lose jobs, shed 400 positions. But factory hiring, while abysmal through August, bounced back in the last four months of the year, adding 7,300 jobs.
“When we see the manufacturing sector do well, these are products that tend to be sold outside the state, which brings income into the state,” Kalambokidis said.
Heading into 2014, the outlook is for continued job growth, but at a slower rate than in 2013, said Toby Madden, an economist at the Federal Reserve Bank of Minnesota. The state added jobs at a rate of 1.7 percent in 2013, slightly ahead of the national growth rate of 1.6 percent.
The Fed predicts 1.2 percent employment growth for 2014, which would amount to 33,000 more jobs. Business leaders surveyed by the Fed are at a seven-year high for optimism, Madden said, which was reflected in December hiring.
“Overall it’s a good broad-based report,” Madden said. “Minnesota is in an expansion from a jobs perspective, as well as the overall economy.”