Minnesota employers added 8,400 jobs in May, a sharp upturn after two months of job losses, and credit goes to the belated arrival of spring.
“We saw a return of job growth along with the return of spring weather,” said Steve Hine, labor market economist for the state.
Winter took over April in Minnesota this year, leaving snow and ice-covered lakes deep into the month, even in the Twin Cities. The cold delayed hiring across a broad range of industries, including construction, landscaping, municipal parks and pools, resorts, restaurants and fishing.
Hiring returned for those businesses in May, according to figures released Thursday by the Minnesota Department of Employment and Economic Development. The state’s largest monthly gain came in leisure and hospitality, which added 2,900 jobs.
Bill Forsberg, owner of the Timber Trail resort just east of Ely, said he typically hires 15 seasonal workers in April. Not this year. He couldn’t put them to work cleaning and setting up the docks until a month later because Farm Lake was frozen solid. It was thawing until May 15, he said, after the opening of fishing season.
“Usually, you would have done your hiring halfway through April to get everything done and ready for fishing opener, and you couldn’t do that this year,” Forsberg said. “Tourism is alive and well in Ely and Minnesota, but weather can absolutely affect it, just like farming.”
Hine blamed the long winter for weak job reports in March and April, and he predicted that the numbers would improve when it warmed up. Turns out he was right.
“A good deal of the strength here was very clearly a timing-related issue in those outdoor activity areas,” Hine said.
Joblessness was unchanged in Minnesota at 5.3 percent, compared with a U.S. unemployment rate of 7.6 percent. Minnesota has added 43,300 jobs over the past year, a growth rate of 1.6 percent that tracks the U.S. average.
The state has gained just more than 93 percent of the jobs lost during the recession, 10,700 shy of the prerecession peak. After six months of robust job gains ending in February, the state shed jobs in March and April. With the release of the May numbers, the April figures also were revised favorably from 11,400 jobs lost to 10,200 jobs lost.
Still, the monthly statewide jobs numbers tend to be volatile and shouldn’t be taken as absolute, said Laura Kalambokidis, Minnesota’s new state economist. The numbers come from a survey, not a census, and are often revised. More solid state data is typically released several months later.
Looking at year-over-year comparisons, Kalambokidis said, April’s downturn appears to be an anomaly. “If you kind of throw out that crummy April, we had a good start to the year,” she said.
In May, heavy and civil projects drove the gains in construction, as road and bridge work finally got some much-needed momentum. Homebuilding employment, however, has not recovered, despite a nearly 13 percent year-over-year rise in home prices in Minnesota. Residential construction jobs are actually down 2.9 percent, compared with a year ago, and the industry employs a little more than half the people it did in 2005.
“It will be interesting to see if there’s an eventual improvement,” Hine said.
Another area of weakness in the state economy is trade, transportation and utilities, a category that accounts for 18 percent of all Minnesota jobs. Employers cut 5,700 jobs in April and 2,600 jobs in May. April’s biggest weakness was in trucking and warehousing. May’s weakness showed a hiring contraction at department stores.
“Over 5,000 retail jobs have been lost over the last three months, so that is an area of concern,” Hine said.
About 159,000 people were unemployed in Minnesota in May, a number that’s slowly declining as the employment-to-population ratio inches upward from 67 percent in March to 67.2 percent in May.
Long-term unemployment, however, remains a problem. About 51,000 people have been unemployed for 26 weeks or longer.
Over the past 12 months, job growth has been 2.6 percent in the Twin Cities, 1.7 percent in St. Cloud, 1.2 percent in Mankato, 0.8 percent in Rochester and 0.7 percent in Duluth-Superior.