Minnesota lost 200 jobs in August, breaking a streak of sizable gains that suggested that a labor market perceived to be at full employment had room left to grow.
But even with the marginal decline in the number of people working, the state’s unemployment rate dropped to 2.9 percent, its first time under the 3 percent threshold since December 1999. Minnesota’s lowest unemployment rate was 2.5 percent, reached in January and February 1999.
“Among other positive signs, the number of unemployed Minnesotans last month fell below 90,000 for the first time in over 18 years,” Shawntera Hardy, the commissioner of the Minnesota Department of Employment and Economic Development (DEED), said in a statement.
From May to July, Minnesota added 31,800 jobs, the third-largest hiring spree in a three-month period and one that came when the state was already perceived to be near full employment. The stall-out in August raises new questions about whether the state has reached full employment and whether employers are running out of people to hire.
For years, demographers and economists have pointed to data showing that, thanks to the combination of retiring baby boomers, a low birthrate and relatively low influx of new residents, Minnesota’s workforce will essentially stop growing late this decade. With the economic expansion in its ninth year and Minnesota outpacing the nation’s performance for much of that time, the state appears near full employment.
The state jobs agency isn’t ready to make that declaration just yet. In an analytical statement accompanying the latest data release, DEED said, “Generally low and stable unemployment and underemployment mean that Minnesota’s economy is running very close to its full potential. The differences seen when breaking the numbers out by racial groups shows that there is still room for improvement in Minnesota’s employment situation.”
Black unemployment fell to 4.8 percent last month from 5.3 percent in July. That’s still about twice the level of white unemployment, which was 2.5 percent in August. Historically, black Minnesotans have been unemployed at twice the rate of whites. Hispanic unemployment was 5.3 percent in August, down from 5.7 percent in July.
DEED officials caution that there is more volatility in race data and other subsets of the larger employment report because of the smaller sample size.
Last month, construction employers added the most jobs, with 1,700 hires. For the year ended Aug. 31, leisure and hospitality employers added the most jobs.
Also over the 12-month period, Minnesota added 50,904 jobs, a 1.7 percent growth rate. Employment grew at 1.8 percent clip in that time. During that 12 months, Minnesota job additions seesawed in a narrow range of just a few thousand a month until May.
Only two other three-month periods since 1990 saw more people hired than this May to July.