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Minnesota unemployment inches up in March

Minnesota’s unemployment numbers edged up in March as the state lost an estimated 1,800 jobs in a month when the nation added 162,000 jobs.

Minnesota’s unemployment numbers edged up in March as the state lost an estimated 1,800 jobs in a month when the nation added 162,000 jobs (PDF).

The state unemployment rate edged up 0.1 percent to a seasonally adjusted 7.4 percent in March, according to state unemployment figures released this morning by the Minnesota Department of Employment and Economic Development (DEED). The U.S. rate remained unchanged for the third consecutive month at 9.7 percent.

While Minnesota officials described the drop as “a disappointment” in light of the national numbers, they pointed to increases in hours worked and declines in initial jobless claims as positive signs. They also said that as formerly discouraged workers become optimistic about finding work and re-enter the active job seeking population, the unemployment rate will tick up.

“The March figures demonstrate that economic recoveries are not smooth processes, with some months stronger than others,” said DEED Commissioner Dan McElroy in a prepared statement. “Still, we’re seeing some positive trends in Minnesota’s employment picture, including an increase in the labor force and the length of the average work week, and steady declines in year-over-year job losses.”

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1 p.m. update: In a conference call with reporters this morning, McElroy said the economic recovery is “not going to occur simultaneously, month to month in all states.” He pointed out that the state has added jobs in previous months when the national numbers were weak and the overall unemployment rate has trended below the national average.

He noted a few positive indicators as new jobless claims fell 26 percent from a year ago, to 20,500, and were down substantially from the peak of nearly 44,000 claims in both May and June of last year. In addition, the work week edged up to 32.8 hours after holding steady at 32.6 hours over the past three months, which is “a big increase in spending capacity,” McElroy observed.  The portion of the state’s total population in the workforce (labor force participation rate) increased 0.2 percent to 72.8 percent.

Also, February’s employment count was revised to reflect 1,600 jobs lost instead of the 3,400 jobs that were previously reported lost.

Hard-hit manufacturing and construction sectors add jobs
The manufacturing sector has now added jobs for three consecutive months, growing by 6,100 positions since the start of the year, posting the largest gains since 2005.

In spite of that growth, manufacturing employment across the state is down 14,000 from a year ago. While McElroy doesn’t expect Minnesota to regain the 100,000 manufacturing jobs lost over the past decade, he said stability in the sector “would be a welcomed sign.” Calling out machine shops as particularly strong, the employment growth was “across the board” in the durable goods sector for the month.

In light of the durable goods manufacturing pick up, McElroy described a 3,000-job decline around the wholesale transportation sector as “a bit perplexing” and said the disconnect may be caused by the timing of the preliminary estimates.

Construction, which has also been hard hit, gained an estimated 300 jobs in the month, though it has lost 9,800 from a year ago. McElroy cited heavy construction and civil engineering as being “up somewhat more than typical” and said residential construction held steady.

Five of the state’s 11 major sectors added jobs in March, led by manufacturing and by leisure and hospitality, which each added 1,500 jobs.  A gain of 1,200 jobs, primarily in the federal government, is related to census workers and consistent with hiring patterns from the previous census in 2000.

Job losses occurred in professional and business services (down 1,200), education and health services (down 1,000), both of which have been strong job contributors. In the past year, education and health services have gained 3,200 jobs, while professional and business services has added 1,000 jobs.

On a year-over-year basis, in addition to manufacturing and construction, jobs losses have occurred in transportation and utilities (down 9,100), other services (down 3,700), leisure and hospitality (down 3,700), financial activities (down 3,100), information (down 1,800), logging and mining (down 1,000), and government (down 500).

In the state Metropolitan Statistical Areas, St. Cloud held steady over the past year. Job losses occurred in Rochester (down 0.9 percent), Duluth-Superior (down 2.2 percent), Minneapolis-St. Paul (down 2.4 percent) and Mankato (down 3.1 percent), with the overall state down 1.6 percent.