The Minnesota monthly jobs report comes out Thursday morning and if we judge by recent headlines it should be a positive one. Don't put any money on that, though.
Two national stories in the past two weeks have cheered up the economic outlook. Retail sales grew 1.1 percent in September and national unemployment fell below 8 percent for the first time since 2009.
But Minnesota is coming off net job losses in August. Employers cut 2,000 positions, and the state's robust estimate for job creation in July was revised downward -- from 6,800 to 4,800 net jobs.
As the September numbers for the state come out this week, what should we expect? Here are four things worth remembering:
1. Strong retail sales appear to signal the jobs numbers should improve. Because more than two thirds of the American economy is driven by consumer spending, the 1.1 percent increase in retail sales prompted a 128-point rally in the stock market on Tuesday. Minneapolis-based Target's retail sales were up 2.1 percent in September and a survey of large retailers showed 3.9 percent growth in the lull between back-to-school spending and the Christmas season.
There are two caveats: First, retail sales were partly driven upward by sales of the iPhone 5, which was released on Sept. 21. Apple always tends to boost monthly retail sales when it releases new models. Second, Jeffrey Bartash, writing for Marketwatch, argues that the rise in retail sales in part reflects the rising costs of gasoline and groceries:
2. The recent trend for manufacturing does not bode well. U.S. manufacturers shed 16,000 jobs in September, and in Minnesota, manufacturers cut 2,700 jobs in August. The Mid-America Business Conditions index predicted flat to negative growth in the Midwest for the fourth quarter, and Minnesota was one of the weakest states in the index in September, according to Creighton professor Ernie Goss:
3. There are some reasons to take the drop in unemployment to 7.8 percent with a grain of salt. Not that anyone manipulated the numbers, as a loud minority has claimed, but just that the Bureau of Labor Statistics has some built-in volatility in the household survey on which the unemployment rate is based. Try to ignore the headline on this piece, and you'll find some reasonable skepticism about the drop in joblessness from Forbes contributor Robert Barone:
