Minnesota lost 1,500 jobs in August

Employers in Minnesota cut 1,500 jobs in August, a modest decline at the end of what had been a strong summer for job growth in the state.

Most industries lost jobs on the month, with the notable exception of retail trade, according to data released Thursday by the Minnesota Department of Employment and Economic Development.

The state's seasonally adjusted employment rate in August climbed 0.1 percent from the previous month to 4 percent. The U.S. unemployment rate was 4.9 percent.

Labor force participation — the share of the population either working or looking for a job — fell by half a percentage point to 69.4 percent, the lowest level since 1981. The labor force overall has declined by about 9,000 in the past 12 months.

This will be a theme in Minnesota for some time, said Steve Hine, the state's labor market economist. It will be good for job seekers and a frustration to employers.

"If you're out looking for work, and hoping to get a good wage rate out of that job search, conditions look pretty darn good," he said. "If you're an employer looking to expand and hire people at a cheap wage rate, conditions are going to be much more challenging."

Average private sector wages dropped in August by 12 cents an hour, to $26.83 per hour.

Minnesota has added 40,629 jobs over the past year, a gain of 1.4 percent. U.S. job growth in the past 12 months was 1.7 percent.

"We've been very persistently below the national growth rate over the last couple of years," Hine said. "We came out of the recession in a relatively strong manner compared to other states. We also didn't experience the depth of the recession [of] a lot of states that have a significant impact on those national numbers."

California's job market, for instance, is growing rapidly, but it is "digging itself out of a deeper hole," Hine said.

Analysts at Wells Fargo view Minnesota's tepid monthly data with skepticism, arguing that it likely understates job growth in the state. More reliable but less frequently released quarterly data showed a 3.6 percent increase in professional and business services hiring in the first quarter, which is 3.3 percentage points stronger than the monthly numbers.

"Much of that gain has been in professional and technical services, a relatively high-paying subcomponent driven by hiring in medical products and IT," wrote Mark Vitner, a regional economist for Wells Fargo.

The state's five major metropolitan areas all added jobs over the past 12 months, though the gains were, as usual, uneven.

Rochester and St. Cloud led the way with 3 percent growth each. Minneapolis-St. Paul's job growth was 1.8 percent. Mankato was up 0.6 percent, and Duluth-Superior was up 0.5 percent.

Adam Belz • 612-673-4405