Minnesota's long winter cooled job market in March

It took a cold spell to end the hot streak.

Minnesota's long and lengthening winter helped cool the job market in March, as employers cut 5,200 jobs, snapping the strongest six-month streak of job gains for the state in nearly 30 years.

The monthly jobs report, issued Thursday by the Minnesota Department of Employment and Economic Development, also showed that February gains were less robust than initially thought, revised downward from 14,500 to 9,900 jobs.

"Minnesota's economy is still strong, it's just not blowing the doors off the U.S. economy the way it appeared in February," said Tom Stinson, the state economist.

One problem is that it keeps snowing. Construction hiring was weak compared to a year ago, and restaurant and hotel hiring fell in March.

"The weather is definitely affecting hiring," said Nick Bake, owner of Suburban Framing, a firm with its office in Blaine. "Nobody wants to ramp up and gear up on guys right now."

Restrictions that forbid heavy equipment from traveling on roads during the spring thaw could last into mid-May, said Bake, stalling projects across the state. Bake usually hires 10 extra workers in warm months. So far he's hired zero.

Two blocks to the north at Zelo, a brand-new class of 11 patio waiters is almost done with training, said Bob Tinsley, the restaurant's owner. The only thing missing, as heavy snowflakes swirled through downtown Minneapolis, was the patio. "It'll be a couple of weeks of just sitting and waiting," Tinsley said

Minnesota's unemployment rate improved in March to a seasonally-adjusted 5.4 percent, mostly because more people stopped looking for work, dropping the state labor force participation rate to 70.8 percent. The lowest labor force participation rate in recent state history, 70.7 percent, was set in September 2012.

Stinson said falling labor force participation is something to be concerned about long term. But for now, it is more a reflection of people retiring than evidence of growth in the ranks of discouraged workers — people who've given up on looking for a job.

"It's simple demographics," Stinson said. "The fact that we're not seeing jumps in the participation rate when more jobs come available is just kind of [evidence that] the demographics have been in place for quite a while."

Minnesota's March job losses are in line with national trends. The Bureau of Labor Statistics said earlier this month that the nation only created 88,000 jobs in March — far below average and below analyst expectations. The March 1 agreement on sequestration may have indirectly contributed to the declines, said Steve Hine, a state labor market economist. He sees no new weakness in the state economy.

In Minnesota, education and health services shed 2,900 jobs in March, only the second month in the past two years in which those sectors lost jobs. That's likely a blip, especially for health care, which has accounted for almost a third of all Minnesota job creation since March 2009. Employment in government, financial services and manufacturing also declined in March.

"It is a disappointing report," said Toby Madden, an economist at the Federal Reserve Bank of Minneapolis. "Over the past few months it looked like the Minnesota economy was gaining speed."

But Madden said one-month reports are volatile, especially when "weird weather" is thrown into the mix.

Trade, transportation and utilities, construction and professional services added jobs in March. In the past 12 months, employment in only a handful of job sectors in the state has declined. Those are nondurable goods manufacturing, private education, federal government and state government.

The recovery has been slower outside the metro area, with job growth in Rochester, St. Cloud and Duluth not quite cracking 1 percent over a year ago. Mankato was up 1.4 percent, and in the Twin Cities, growth was 1.8 percent.

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