Minnesota jobless rate rises to 8.4 percent

Minnesota's unemployment rate rose to 8.4 percent in June, state officials said Thursday, as employers slashed 16,700 jobs during the month -- wiping out the last of the jobs the state gained since the 2001 recession.

While the number was far from the nation's 9.5 percent jobless rate for June, state results were still a disappointment because Minnesota had experienced several months of relatively flat job losses. The state's jobless rate was 8.1 percent in May. But more telling, the number of jobs lost in May was recently revised from 1,600 to 3,300. June's whopping jump was also disappointing, officials said.

"Leading indicators still leave us with the fact that jobs in Minnesota have not recovered as fast as we had hoped," said Dan McElroy, commissioner of the state's Department of Employment and Economic Development.

Steve Hine, Minnesota's director of labor market information, said the monthly job numbers are "volatile" and affected by seasonal elements.

"As bad as the [June] monthly report is ... [it also] highlights the magnitude of the losses since this recession began," he said. "With this month's report, our employment number has now fallen below the previous recessionary trough. We have lost, now, all of the jobs that we had gained during the expansion after the 2001 recession."

The construction sector lost 3,900 jobs in June, manufacturing lost 3,700 jobs and professional and business services lost 3,500.

In contrast to its May gains, the leisure and hospitality industry shed 3,000 jobs in June. (State officials noted that May job numbers may have benefited from one-time staff increases for summer venues such as Valleyfair and Voyageurs National Park.) Logging and mining jobs fell 1,000. And jobs in the government, services and information sectors fell a respective 800, 800 and 700 positions. Education and health care jobs also fell by 700.

There were a few gains. The trade, transportation and utilities sector added 800 jobs last month and the financial activities sector increased 600 positions.

Looking ahead, the state might be affected by the recent and pending dealership closings pushed by General Motors and Chrysler, but the exact impact isn't known yet, state officials said.

On average, laid-off Minnesotans are collecting unemployment benefits for about 21 weeks. That's up from 20 weeks just a few weeks ago and up from 13 weeks one year ago. McElroy noted that Minnesotans can now collect up to 79 weeks of benefits because of the recent extension of state and federal programs.

McElroy stressed that other resources are available to help and that job seekers should contact one of the 47 state workforce centers in their region or call 1-888-GET-JOBS to find out about jobs.

"We have unprecedented amount of dollars available, largely because of stimulus dollars, but also because of state funds for programs in our workforce centers. And we have more people in our workforce centers than we have in a long time," he said.

Hine noted that construction firms added jobs in June at a significantly slower rate than in prior years. He added that it's hard to know how fast stimulus dollars were coming into the picture.

The state had 2,649,100 jobs in June, down slightly from 2,665,800 in May and down 4 percent from a year ago. The nation's job total fell 4.2 percent from a year ago.

John Challenger, CEO of outplacement firm Challenger, Gray & Christmas, said he doesn't believe the nation's economic recovery will be swift.

"In each of the last two recessions, the job market was the last area to recover," Challenger said. "There is no reason to think that we won't see another jobless recovery in the wake of this prolonged recession."