Minnesota's jobs economy is officially halfway back from the depths of the recession.
The state gained 6,200 jobs in February and has added 32,300 jobs in the last three months. Since employment bottomed in September 2009, the state has reclaimed 81,400 of the 156,300 jobs lost during the recession -- or 52 percent.
"This has been a long time in coming," said Steve Hine, labor market information director for the Minnesota Department of Employment and Economic Development (DEED).
Thursday's report from DEED showed that the unemployment rate rose slightly from 5.6 percent in January to 5.7 percent in February, a rise Hine described as not statistically significant. Minnesota's overall jobless rate remains far below the national rate of 8.3 percent.
For February, the educational and health sector provided most of the job gains, followed by government, construction and hospitality. The business service sector, which has been a significant job creator in recent months, lost 4,000 jobs during February as temporary and corporate headquarters jobs were trimmed. Retailers shed 900, while factories cut 600.
"The labor market recovery appears to be gaining steam, with three months of strong job growth. That's all right," said Mark Phillips, DEED commissioner.
Toby Madden, senior economist at the Federal Reserve Bank of Minneapolis, agreed that Thursday's report was generally good news, with job growth helped by "unseasonably warm weather and a leap year" that added an extra sales day to February. But Madden said he still is concerned about unemployment because the jobless rate rose instead of continuing its downward trajectory.
The state is growing jobs at a 1.1 percent annual rate. Madden expects that to reach a 1.3 percent rate by year-end. Still, that's below the current national growth rate of 1.6 percent.
Meanwhile, the U.S. Labor Department announced Thursday that initial claims for unemployment fell again, dropping 5,000 to 348,000 for the week ending March 17. That's the lowest number since March 2008.
In Minnesota, jobless claims also fell slightly during February to 23,561. At the same time, the labor force participation rate fell slightly in February as more baby boomers retired.
John Budd, a professor and chairman of the Work and Organizations Department at the University of Minnesota's Carlson School of Management, said just looking at job gains isn't enough to claim a victory for the state, because not all jobs are created equal.
"We are assuming that all of these jobs are good, but there are mixed results there as well. We need a better sense that these are good jobs that people can support their families on," Budd said. While construction jobs are probably good-paying jobs, education jobs often are not. And February's loss of business service jobs means good salaries went away, he said.
"It's hard to really get a good picture of the state of the economy just by looking at [job numbers]," Budd said.
Officials at Resource Inc., which runs several employment programs for 3,000 displaced workers on behalf of the state, said they are seeing the job market loosen up. But clients are getting $40,000-a-year jobs, when they used to make $60,000. And not all the jobs provide health insurance and other benefits that help support families, said Mark Struthers, a senior employment counselor at Resource Inc.
"Things are certainly better than they were two years ago, but we are not out of the woods yet," he said. His team is placing job seekers in railroad, food service, manufacturing and some warehouse jobs. And demand for IT workers has spiked again, Struthers said. He is also noticing new openings for human resource professionals, which is a hopeful sign.
In February, seven sectors added jobs in Minnesota while four others shed workers.
While the professional and business services sector lost 4,000 jobs in February, the sector has gained 14,200 jobs in the past 12 months.
Hine said the sector fell because temporary employment agencies scaled back during the month, as did hiring at various corporate headquarters, he said. The once-surging temp-agency sector is expected to slow as the economic recovery solidifies and corporations begin hiring more full-time workers without the use of temp agencies, Hine said.
Struthers at Resource is already seeing that trend. Temp recruiters at Thursday's job fair said more of their clients are forgoing temporary assignments and hiring job candidates directly.
"It's just one more barometer that things are changing," Struthers said.
Dee DePass 612-673-7725