State lost 4,200 jobs in July

Minnesota lost 4,200 jobs in July, disappointing news in a year so far of tepid job growth for the state.

The unemployment rate remained at 4.5 percent, according to figures released Thursday by the Minnesota Department of Employment and Economic Development. The U.S. unemployment rate in July was 6.2 percent.

June's job gains were also revised downward by 3,600, driving home the point that over the first seven months of the year Minnesota's job market has been stuck in neutral.

After adding 41,900 positions from August to December 2013, the state has added only 2,900 jobs since January. Some 133,000 Minnesotans are officially unemployed, and thousands more are working part-time jobs when they would rather work full time.

State economists cautioned, however, that the latest job numbers may be misleading. Adjusting the figures seasonally using normal weather patterns and the timing of school years is complicated, and has been more difficult in recent years thanks to the long, severe winters, said Steve Hine, the state labor market economist.

"By digging into the numbers a bit more deeply than just these top-level seasonally adjusted numbers, I have to conclude that our job growth and our employment strength is considerably greater than these particular numbers would reveal," Hine said. "Not only July's numbers, but the numbers we have seen over the past few months."

The biggest job losses in July were in private education, which shed 4,800 jobs.

Information, which includes publishing and broadcasting, lost 1,000 jobs. Construction lost 700 jobs.

The losses were offset in part by gains in manufacturing, retail, transportation and warehousing, hotels and restaurants, and administrative support and temporary jobs.

One bright spot has been heavy construction, which added 500 jobs in July and has added nearly 4,000 positions in the past 12 months.

Meanwhile, Minnesota's workforce continues to shrink, which suggests the unemployment rate will continue to fall.

Labor force participation — the share of the working-age population that is either working or looking for work — fell to 70.1 percent. The indicator threatens to fall below 70 percent for the first time since October 1980. Most of the decline is due to baby boomers retiring, Hine said.

Laura Kalambokidis, the state economist, said she'd feel better if job growth had been stronger so far in 2014. But other indicators — like job vacancies, the average workweek and the number of people filing for unemployment — have been positive.

Initial claims for unemployment insurance fell by 14 percent in July compared with a year earlier, to about 10,700.

"It would be more concerning if we were seeing more people laid off," Kalambokidis said. "Sluggish job growth is not as worrisome as people losing their jobs."

The debate over the reliability of the monthly job numbers is an old one, and takes on more significance in an election year.

"They're volatile, they get revised," Kalambokidis said.

Another source of jobs numbers, the Quarterly Census of Employment and Wages, is based on unemployment insurance records, which account for all workers. Those figures are more reliable, but they are released on a six-month lag to give analysts time to collect and carefully adjust the data.

The esoteric debate over job numbers had its time in the sun in 2011, when Wisconsin Gov. Scott Walker argued the quarterly census numbers were more accurate and was lambasted for releasing them early. The fact that he did so a few weeks before his recall election opened him to extra criticism.

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