The Minnesota job market has to be peaking, the newest data seem to say, though it may still have a few steps left.
The state added 500 jobs in December, the Minnesota Department of Employment and Economic Development said Thursday. That’s a small number in a state with about 3 million workers.
And the unemployment rate was 2.8 percent for the fourth month in a row, a level it reached in September for the first time since May 1999.
For the full year, Minnesota added 31,441 jobs, a growth rate of 1.1 percent. That was below the national rate of 1.8 percent. At such a low level of unemployment, the state’s slower job-growth rate suggests it is closer to full employment than the nation and may not see much more improvement.
“We managed to get down to a 2.5 percent [unemployment] rate at the end of the 1990s expansion but only very briefly,” said Steve Hine, the state’s labor market analyst. “I would not be surprised if 2.8 is as low as we go this time.”
Even so, Minnesota employers keep finding a few more people to hire. Seven of the 11 employment categories designated by DEED gained jobs, while four lost them. The biggest gains last month were among leisure and hospitality firms and in the construction industry, each group adding more than 1,000 people.
Employers in professional and business services shed 2,600 jobs last month, financial activities were down 900, education and health services down 700 and government down 100.
The state agency’s survey happened before the shutdown of the federal government in late December. As a result, its effects will be reflected in the January data. With federal workers technically still employed but not working, the data is more likely to show job cuts in firms that are government contractors, Hine said.
In the nearly 10 years since the U.S. emerged out of the last recession, Minnesota has almost 360,000 more people working than it did at the depth of the downturn. About 150,000 of those people were unemployed in the recession and now have jobs. The other 210,000 or so moved into the state, came out of schools or got jobs through other changes that increased the labor force.
Year-end data show Minnesota employers continue to hire people who typically are on the margins of the workforce. DEED’s monthly survey produces an unemployment figure for people who do not have a high school diploma, usually an essential credential.
The rate has fallen to 3.2 percent at the end of the year from 9 percent at the start and around 6 percent in August, Hine said. That’s not much higher than the 2.1 percent unemployment rate for Minnesotans with a college degree. The agency doesn’t consider such rates to be official because the sample sizes are small, but they show a trend.
“That’s an incredibly low unemployment rate” for people without diplomas, Hine said. “Conditions are making it necessary for employers to look broadly for the individuals they want to bring on board.”