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Minnesota's unemployment rate drops to 7 percent

The state unemployment rate dipped to a seasonally adjusted 7 percent in May, according to figures released today by the Minnesota Department of Employment and Economic Development (DEED).

Minnesota’s unemployment rate for May is 2.7 percentage points below the U.S. rate of 9.7 percent. The state’s rate for April also was adjusted down by 0.1 percent to 7.1 percent.

The state added 5,600 jobs in May. Since the low point of the recession in September 2009, Minnesota has added 34,200 jobs.

“Minnesota is experiencing signs that economic recovery is progressing,” said DEED Commissioner Dan McElroy in a prepared statement. “While it will take some time for employment to return to pre-recession levels, I am encouraged to see job growth for the second consecutive month.”

McElroy also noted that the length of the average work week in May increased by 0.4 to 33.1 hours. It had held steady at 32.7 hours since January 2010.

With a statewide workforce of 2.6 million, the increase adds about 4 million hours per month, which “puts a lot of dollars in pockets and purses,” McElroy observed in a teleconference with reporters.

May’s national numbers from the U.S. Bureau of Labor Statistics rose by 431,000 jobs, but 95 percent of those were government jobs driven by  temporary census workers, disappointing analysts. By way of contrast in Minnesota, the private sector added 2,600 jobs or 46 percent, while the government added a net of 3,000 jobs, or 54 percent of the total, for May.

Jobs were added across nine of the 11 industry sectors tracked by DEED.

“One glaring weakness continues in construction,” observed Steve Hine, research director at DEED. “We are not yet seeing a rebound there.”

The construction sector lost 2,200 jobs in the month and 12,800 for the year. Hine speculated that the mild April allowed an early start to the construcution season, so that month-to-month moves might reflect that atypical pattern. Financial activity also saw a loss of 1,400 jobs in the month of May.

Manufacturing added 400 jobs, the fifth consecutive monthly gain. Other gains occurred in education and health services (up 2,600), trade, transportation and utilities (up 1,300), professional and business services (up 1,200), logging and mining (up 200), information (up 200), other services (up 200), and leisure and hospitality (up 100).

Temporary help, which McElroy described as a “canary indicator” of recovery, grew 14.5 percent over the past 12 months, the largest rate of gain since mid-2006.

Across the state’s metro areas, job gains occurred in the past year in St. Cloud (up 1 percent) and Rochester (up 0.6 percent) while the Twin Cities and Mankato saw declines of 1 percent and 2.6 percent, respectively. Duluth-Superior was flat over the past year.

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