State adds 7,200 jobs for a second month of gains

For the second straight month, Minnesota posted a strong boost in hiring as the state rallied from what so far has been a year of tepid job growth.

Combined with an upward revision to an already robust August report, the state's gain of 7,200 positions in September brings net job growth to 23,000 this year, according to the Minnesota Department of Employment and Economic Development.

Despite the recent surge, Minnesota has seen the lowest number of jobs created in the first nine months of the year since 2010, as a harsh winter dramatically slowed the national economy. When spring finally arrived, the state job market regained its footing after losing jobs for four months, and has now added 28,000 since the end of April.

"We had that really weak first quarter," said Tom Stinson, an economist at the University of Minnesota. "We had really no growth."

The latest jobs report, released Thursday, showed that the state's unemployment rate dropped to 4.1 percent, the lowest level since 2006 and well below the U.S. average of 5.9 percent. It was the last jobs report before the midterm elections Nov. 4.

"Unemployment has been cut in half from its recessionary high," said Steve Hine, the state labor market economist.

The biggest job gains last month were in hotels and restaurants, which added 4,300 jobs, and in the professional, scientific and technical sector, which added 2,700. All of Minnesota's gains in September were in the private sector, a common trend since the end of the Great Recession. Government shed 4,200 jobs, according to the latest figures.

The state's monthly job report is an estimate that at times can deviate widely from the more refined results the government releases several months later. That was clear in September when data released from 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 only 19,000 jobs — less than half the gains shown by monthly job reports over the same period.

Despite a shrinking sample size and struggles with seasonal adjustment, the monthly jobs numbers still offer the only approximation of the job market in something close to real time, economists say.

"They continue to be the best estimates we have of how the job market has done over the past few months," Hine said.

The unemployment rate, which includes only the jobless who recently looked for a job, is falling in part because the share of working-age people who are employed or looking for a job is falling, while retirements are climbing. The labor force participation rate ticked downward in September to 69.8 percent, the lowest level in 34 years.

Over the past 12 months, which includes the big gains in fall 2013, the state's jobs picture looks encouraging. Professional and business services have led all sectors, adding 11,161 jobs. Manufacturing has added 10,376; education and health services added 8,022; and construction added 6,996.

The number of officially unemployed Minnesotans fell to 122,000 in September, compared with 245,000 in spring 2009. Black unemployment in Minnesota has now fallen to 10.2 percent, compared with 15.4 percent a year ago. Latino unemployment is 8.2 percent, and white unemployment is 3.8 percent.

Job growth has been strongest in Mankato, St. Cloud and the Twin Cities, but Duluth and Rochester have also posted gains since last September.

"The yearly numbers say that we're kind of doing about normal," said Stinson, the former state economist. "It just seems to me that Minnesota's economy is doing OK."