Minnesota lost 5,200 jobs in December

The state's unemployment rate continues to fall, with the latest reading at 3.6 percent.

January 23, 2015 at 3:48AM
A job seeker checks his mobile phone outside the Recruit Military veteran job fair in San Diego, California, U.S., on Thursday, Feb. 27, 2014. More Americans than forecast filed applications for unemployment benefits last week, a sign the labor market is improving in fits and starts. Photographer: Sam Hodgson/Bloomberg
Minnesota's jobs scene, one of the best in the nation, dimmed a bit in December. (Evan Ramstad — Bloomberg/The Minnesota Star Tribune)

New job numbers for December threw cold water on what had been a run of gains in Minnesota, as employers cut 5,200 jobs the last month of the year and November's gains were revised downward by 4,000.

"We'll file this one under the category of 'all good things must come to an end,' " said Steve Hine, the labor market economist for the state.

Minnesota added 33,100 jobs in 2014, according to figures released Thursday by the Department of Employment and Economic Development. That was the weakest annual job growth in Minnesota since 2010 and lagged behind national job growth by almost half.

Despite the December job losses, the state unemployment rate fell a tenth of a point to 3.6 percent, according to the state's figures. U.S. unemployment is 5.6 percent.

Asked how the unemployment rate could fall while the state shed jobs, Hine noted that the unemployment rate and the total number of jobs are from different surveys, each with its own margin of error.

"They are counts of different things done by different surveys with different methodologies," Hine said.

Unemployment is probably about as low as it's going to get in Minnesota, give or take a tenth of a percentage point, said Louis Johnston, an economist at the College of St. Benedict and St. John's University. Also, slower job growth in 2014 "indicates that we're getting somewhere near full employment for Minnesota," he said.

"I think it's because we recovered faster," Johnston said. "There's less room for us to expand."

Worker pay remains stagnant, just as it has nationally, according to Thursday's figures. Average wages for Minnesota private sector workers fell 3 cents in December from $25.77 per hour to $25.74 per hour, and have fallen 20 cents since December 2013.

Most industries shed jobs in December, especially government, manufacturing, real estate and health care. Trade, transportation and utilities led all industries by adding 4,100 new jobs. Construction, which showed some encouraging signs in 2014, now appears to be flat for job growth on the year.

Some deceleration toward the end of 2014 isn't surprising, said Bill Blazar, interim president of the Minnesota Chamber of Commerce. Many companies are less interested in expanding than they were in 2012 and 2013, he said.

"There is some cooling or slowing of the economy, so I'm not surprised to see that the employment numbers for December and for '14 weren't as good as the previous two years," Blazar said.

The chamber's surveys show companies are increasingly worried about finding qualified workers in Minnesota, and many are embracing automation, Blazar said.

"There's more interest in adding machinery and equipment than in hiring people," Blazar said.

To bolster the workforce, it will be important to train and find work for veterans, black men and American Indians, Blazar said, as unemployment is still high for those groups.

Black unemployment ticked upward from 11.2 percent in November to 11.4 percent in December. Hispanic unemployment fell in December to 7.2 percent.

The state's monthly job report is an estimate that at times can deviate widely from more refined results the federal government releases several months later. That was clear in September when the Quarterly Census of Employment and Wages, widely considered the gold standard for job numbers, showed that from March 2013 to March 2014, the state added less than half as many jobs as the monthly reports showed.

The more recent second-quarter figures show that the monthly numbers through June were still overestimating the state's job gains by about 10,000.

Across the state, Mankato closed a strong year of job gains, adding more than 2,000 jobs for 3.7 percent growth. The Twin Cities and St. Cloud both grew at a 1.8 percent rate. Rochester grew at 0.7 percent, and Duluth-Superior lost jobs at a rate of 0.7 percent.

Adam Belz • 612-673-4405 Twitter: @adambelz

Steve Hine
Steve Hine, labor market economist for the state of Minnesota (The Minnesota Star Tribune)

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Adam Belz

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Adam Belz was the agriculture reporter for the Star Tribune.

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