News Column

Minnesota Nears Prerecession Employment Levels

Aug 16, 2013

Minnesota employers added 4,300 jobs in July, led by hiring for government and financial sector positions.

The state has gained 71,488 jobs in the past year, a growth rate of 2.6 percent, compared with the U.S. rate of 1.7 percent.

"On an annual basis, the Minnesota labor market is recovering at a pace we haven't seen since the expansion of the 1990s," said Katie Clark Sieben, commissioner of the state's Department of Employment and Economic Development.

With July's net gain in jobs, the state is also close to its prerecession employment level and now needs only 5,500 more jobs to regain all the jobs lost in the recession, which started in 2007.

The state's unemployment rate held steady at 5.2 percent in July, influenced by a number of data points that offset the jobs gain.

Despite improving weather and indications that more homes are being built, the state lost 1,700 construction jobs last month. But state officials said that the nonseasonally adjusted numbers for construction weren't as bleak and that it's hard to get the seasonal adjustment right for construction because jobs are added and dropped quickly as demand fluctuates.

Even with the July decline, Minnesota's construction sector is still up 2,600 jobs, or 2.4 percent, over last year. The national growth rate for construction jobs in the same period was 2.8 percent.

The sectors with the biggest job gains in July were government, up 4,000 jobs; financial activities, up 2,300; and leisure and hospitality, up 1,400.

Much of the growth in government jobs was in the local government sector. Compared with other sectors, government didn't start shedding jobs until late into the recession, and hit its low point in July 2012, said Oriane Casale, assistant director of the state's Labor Market Information office. In the past year, it's shown more of a bounce, adding 15,700 jobs, for a 4.1 percent growth rate.

The largest July decline in jobs was in educational services, down 4,200 jobs. Those losses were largely in private education positions, Casale said, and are part of a longer-term trend. "We've been losing jobs in that industry for the last six to eight months," she said.

At Robert Half International, an employment agency that specializes in professional jobs such as accounting and legal positions, business has been up recently, said Jim Kwapick, the district president based in Minneapolis.

Growth in the number of temporary positions has risen as the economy has recovered, but "conversions" -- people moving from temporary to full-time jobs with the same firm -- "are through the roof," Kwapick said.

Another indicator of a stronger economy, he said: More of Half's clients are getting counter offers from the employers they were planning to leave for a new job.

In Wisconsin, the unemployment rate was 6.8 percent in July, which held steady from June's levels, the state reported. Wisconsin added 1,800 private-sector jobs for the month.

Nationally, the number of Americans seeking unemployment benefits dropped 15,000 last week to its lowest level since October 2007. That's considered a sign of dwindling layoffs and steady but modest job growth.

Overall in Minnesota in the past year, manufacturing is the only major sector to report a net loss in total jobs, down 2,500. The sectors with the best growth rates in the past year were professional and business services -- up 16,200 jobs or 4.7 percent -- and leisure and hospitality, up 12,200 or 4.7 percent. Others showing marked gains included information, up 1,100; and trade, transportation and utilities, up 13,000.

Minnesota's labor force participation rate dropped to 70.5 percent in July, which is as low it's been since 1983. Demographics are part of it, as more baby boomers continue to reach retirement age and leave the workforce.

The participation rate was as high as 75 percent early in the 2000s but has been on a steady decline since 2002, state data show.

The state's labor force participation was lower in the 1970s, often at 66 percent to 68 percent.



Source: (c)2013 Pioneer Press (St. Paul, Minn.). Distributed by MCT Information Services.


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