Minnesota employers cut 4,100 jobs in December

Minnesota's unemployment rate remained unchanged in December at 7.4 percent despite employers who cut 4,100 jobs and partly because of 8,000 workers who simply left the labor force due to retirement, discouragement or other reasons, state officials announced Thursday.

The number of hours worked per week by Minnesotans fell slightly in December, slipping back to October levels. The state also saw little change in the number of temporary jobs for the month, a key economic indicator that had risen by 7,000 in recent months. Initial unemployment insurance claims in the state fell for the year by 9.4 percent.

Still, the mixed results disappointed state officials who expected job losses for the month to be lower.

"I think this job report is another one of those very mixed bags of both positive and negative developments," said Steve Hine, labor market information director. "We were anticipating a little more strength both nationally and within the state considering recent trends. So we are disappointed in terms of the drop of jobs here."

Another sobering item was the revision to November's job data, which left the state losing 1,500 jobs for that month instead of the 3,000 gain that was reported.

On the plus side, Minnesota's 7.4 percent jobless rate for December and November remained lower than the nation's 10 percent rate. State officials also took heart in the fact that seasonally adjusted initial unemployment claims fell in Minnesota from 33,472 in November to 31,645 in December.

Also the number of job postings on MinnesotaWorks.net rose to 21,000 this week, a level not seen for about a year. Some U.S. Census jobs were among the new postings, Hine said. Total postings had been in the 8,000 range as recently as this summer.

Job losses during the month occurred in trade, transportation and utilities, with most of those 3,800 job losses occurring in retail, "which we were little surprised at," McElroy said.

Other December job losses occurred in construction (down 1,700), financial activities (down 1,700), leisure and hospitality (down 1,300), education and health care (down 900), and "other services" (down 300).

Five sectors added jobs in December. Professional/business services gained 3,900 jobs, while manufacturers added 1,000 and information firms and government entities each added 300. The logging and mining sector added 100 workers.

State economist Tom Stinson and other economists noted that December retail hiring was lower than expected. Seasonal adjustments could positively affect January numbers as fewer layoffs are expected in the wake of December's weak retail job gains, they said.

Going forward, economists also expect Minnesota's jobless rate will rise to 8 percent sometime in 2010 as more discouraged workers turn hopeful and restart their job hunt.

Year-over-year job losses in 2009 hit manufacturing (33,100), trade, transportation, utilities (17,700), professional/business services firms (8,700); and construction (7,800). Leisure and hospitality dropped 4,900 jobs, while government, other services, information and financial firms, cut a respective 4,100, 4000, 2,500 and 1,800 workers. Logging and mining lost 1,000 jobs.

Only the sector known as "education and health services," enjoyed year over year job gains, adding 4,800 jobs.