State's view brightens on jobs

A new analysis shows that Minnesota's job market is probably in better shape than we thought.

The state has clawed back about 110,000 of the 156,000 jobs it lost in the recession, a 70 percent recovery, state economists said this week in their latest forecast. They based that conclusion on a set of job data that's less current but considered more reliable than data the state issues every month.

That monthly data has shown a job recovery closer to 55 percent of what was lost. But job creation appears to be twice what the monthly reports have been saying, said Steve Hine, the state's labor market economist.

"I think that's pretty significant," he said.

Meanwhile, employers across the nation added 146,000 jobs in November, surprising analysts who thought superstorm Sandy would have slashed employment, the federal government reported Friday.

The discrepancy in the Minnesota numbers is between the federal government's monthly household surveys and the state's quarterly census of employers.

State-specific monthly job numbers from the U.S. Bureau of Labor Statistics (BLS) are based on surveys that state economists like Hine have argued are flawed. The quarterly census is based on unemployment insurance records, which account for all workers.

Minnesota's economic forecast uses the same logic, and the implication is that Minnesota likely has 23,400 jobs that haven't been reflected in the job numbers for most of the year.

The recovery is still slower than economists would like -- and fragile.

The fearsomely painted fiscal cliff -- the threat of automatic federal tax increases and spending cuts -- has apparently broken a streak of gains for consumer confidence. The University of Michigan reported on Friday that its index of consumer sentiment has fallen to its lowest level since August.

State economists believe a jump over the cliff would destroy 70,000 jobs in Minnesota, sending the job market back to June 2010's level. The rough outlines of the scenario were described in a series of economic forecasts published this week by the Minnesota Management and Budget Office.

The state now has 2.7 million jobs and must create 2,000 per month just to keep up with population growth.

Tom Stinson, the state economist, said the statistics matter for policymaking purposes, but most people gauge the economy by looking around and by talking to each other.

Minnesota's economy is growing slowly, he said. Leading indicators such as temporary help, average hours worked, job vacancies and the number of unemployed have all improved. The average workweek has risen three years straight. Initial jobless claims are low enough to indicate a healthy job market.

The revision to the jobs number is reassuring, Stinson said, because it says Minnesota is not underperforming the nation. But the state is far from recovered.

"People know when times are good and people know when times are bad," Stinson said. "I honestly don't think that the guy on the street knows about or cares about what the BLS or DEED [the state Department of Employment and Economic Development] say about job creation in the state and country."

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