State unemployment drops

When Veronica Ransom learned her school wouldn't have a position for her as classes resumed last month, the Spanish teacher joined the state's unemployed, making her part of what state officials described Thursday as a wave of teachers to lose jobs this year as local budgets shrank.

"I wasn't even told," Ransom said Thursday, thinking back to her layoff from the Bloomington School District. "I was just given a letter."

Teachers were among those hit hardest in the latest round of unemployment data, which showed 7,900 jobs were lost statewide in September. The grim news was softened somewhat by the state's unemployment rate, which fell sharply to 7.3 percent for September, down from 8 percent in August, said state officials.

The seeming disconnect between a state offering fewer jobs yet experiencing a falling unemployment rate in the same month could be partly explained by the fact that the figures are collected in two different surveys, said Kirsten Morell, a spokeswoman for the Minnesota Department of Employment and Economic Development (DEED).

"It's not uncommon for them to move in a counterintuitive manner," she said.

State economist Tom Stinson worried that the new unemployment rate fell so far from the previous month that it might be due in part to some statistical anomaly.

"This is a big change, and the concern is that anytime you have a big change in a number that comes from a relatively small survey, it may just be a problem with the sample," Stinson said. A similarly low number next month would confirm the unemployment rate has fallen this far, he added.

The state's unemployment rate is now 2.5 percentage points below the national seasonally adjusted rate of 9.8 percent, which climbed one-tenth of a point since the August report.

Still, the state's 0.7 percent drop in the seasonally adjusted unemployment rate from August to September continues a trend of falling unemployment levels that stretches back to June.

"There are real forces at play here that are bringing our unemployment rate down," said Steve Hine, labor market information director at DEED.

Minnesota's falling unemployment rate will likely trigger a reduction in unemployment benefits. Federal officials set the length of benefits by the unemployment rate, and if the rate falls below 8 percent on a three-month rolling average, benefits would be reduced from a maximum of 79 weeks to 72, affecting some 7,000 Minnesotans. The state's unemployment rate was 8.1 percent in July and 8 percent in August.

The report shows that some sectors of the state economy have clawed back from steep job losses, with five of the state's 11 industry sectors gaining jobs. Manufacturing rekindled 1,800 jobs in the past month, though it's still down 36,900 for the year. Transportation and utilities gained 2,600 jobs in the past month, though it's down 23,300 for the year. Information, mining and logging and financial activities also recorded small gains in September.

Some 5,600 local government jobs statewide were lost in September, the report shows, with many of those coming from education, Hines said. Some 4,900 jobs were also lost in the leisure and hospitality sector, and the health care and education sector lost 1,300 jobs. Smaller losses were recorded in construction, down 700 jobs, and professional and business services, down 600 jobs.

Teachers appeared to be the biggest losers in the jobs report, with far fewer than normal showing up in school classrooms this fall. State officials typically expect to see a 17 percent increase in local government employment in September as teachers return to school, Hine said. This year, that figure bumped up just 12 percent. Some of that may be due to this year's later-than-normal Labor Day, which could have thrown off the count, said Hine, adding he would be surprised if the number wasn't corrected somewhat when the October labor report comes out.

The state's 72.3 percent job participation rate -- a number that counts people of working age who are either employed or unemployed but looking for work -- is among the highest in the nation, McElroy said.

In raw terms, the state lost 7,900 jobs from its 2.64 million total, a 4.5 percent decline for the past year. That compares to national job losses of 4.2 percent for the past year.

Some 15,000 Minnesotans found work in September, but 19,000 fewer were unemployed, meaning about 4,000 people left the workforce. Some of those people may have become discouraged and simply stopped looking for work, McElroy said. But he pointed to enrollment figures at the University of Minnesota, the state college system and technical and trade schools as anecdotal evidence that many unemployed people have gone back to school, which also takes them off the unemployment count.

Matt McKinney • 612-673-7329