Jobless rate hits 25-year high in Minnesota

Minnesota's unemployment rate jumped to 8.1 percent in February, the highest rate in 25 years.

Employers in the state shed 13,300 jobs last month, according to figures released Thursday by the Minnesota Department of Employment and Economic Development (DEED).

DEED Commissioner Dan McElroy pointed out that the pace of job losses in Minnesota is slowing but noted that Minnesota and the country are now shedding jobs at nearly the same rate. Minnesota lost about 3.2 percent of its jobs in the past year, while the nation lost 3.1 percent.

Nevertheless, the February job losses in Minnesota were fewer than the recently revised January figure of 18,500 jobs lost. Nationwide, employers cut 651,000 jobs in February.

"The global recession has touched nearly all business sectors here and elsewhere in the country," McElroy said. "But we saw some signs of improvement in Minnesota in February, including a slowdown in the number of jobs lost and a slightly better labor force participation rate. ... It's not good news, but it's less bad news than we expected."

Research firm Global Insight forecasts the national unemployment rate to hit 10.4 percent in 2010. State officials have not projected how high Minnesota's unemployment rate could go.

The modern high, 9 percent, was in November 1982, when more than 195,000 Minnesotans were out of work. More Minnesotans -- 238,328 -- were looking for work in February, but the state also has 718,294 more people working than it did in 1982.

Minnesota's manufacturing sector reported the largest job losses last month, shedding 5,100 positions. Business services dropped 4,200 jobs, while the retail, trade, transportation and utilities sector lost 2,700 jobs. Construction lost 1,400 jobs, hotel and leisure 900, information services 700 and financial services 600.

McElroy said he expects construction employment to begin to perk up with the return of warm weather and introduction of federal stimulus money.

About $7 million in stimulus funds to help job seekers find employment will trickle into the state over the next 18 months. Funds released to date have already added 15 job-coaching positions in some of Minnesota's 47 Workforce Centers. Another 45 state jobs will be added shortly, McElroy said, noting that the state's various nonprofit and county "partners" are expected to add even more job-counseling workers.

Terry Randolph, who recently had to shut down his public relations firm in downtown Minneapolis, applied this week for one of the job-counseling positions and is hopeful he will hear something soon.

Randolph is one of about 700,000 self-employed workers struggling in this economy. Another 2.69 million workers are classified as employees with wage-paying jobs in the state. That's down 3.2 percent from a year ago. Laid-off workers are now collecting unemployment checks for an average of 20 weeks before landing a job, McElroy said.

Metro, Iron Range hit hard

As a result, it is not surprising that job losses have been highest in the metro area (down 3.4 percent) and in the northeastern part of the state (down 2.3 percent), which is where the Iron Range has been particularly hurt. The Rochester region saw a 0.2 percent decline in jobs, while the St. Cloud region experienced a 1.2 percent drop.

Year over year, Minnesota trade, transportation and utilities firms also lost a net of 15,500 jobs, while leisure and hospitality firms cut 9,300 jobs. Service firms lost 2,800 jobs, government 700, information 500, logging 200 and financial firms 100 after factoring in some monthly gains reported earlier last year.

The state saw some job growth in February as education and health care added 2,100 jobs and government added 200. While the numbers are minuscule in comparison to the number of jobs disappearing, state officials said education and health care have been consistently strong performers.

Nancy Ninteman hopes that bodes well for her as she looks to change careers and get a job in health care after recently losing her administrative job in higher education.

Still, she's optimistic about finding a job soon in health care. After having to care for her ill father she realizes, "This is my calling."

In separate news, state officials announced Thursday that five grants worth a total of $2 million will be issued to help retrain recently laid-off workers. Displaced workers from Hennepin County Medical Center, North Memorial Medical Center and Park Nicollet will share a $490,000 grant, while Cummins Power Generation in Fridley will receive a $570,000 grant. The other grants will go to: Entegris ($504,000), Ad Graphics in Hugo ($210,000) and Gerdau Ameristeel ($190,000).