Minnesota’s jobless rate holds steady at 7 percent

The last state unemployment numbers before the election show Minnesota’s unemployment rate holding steady at 7 percent in September, even as employers trimmed 9,900 jobs.

The unemployment rate held steady even with the decline in jobs because it is derived from a separate household survey and reflects the number of people actively seeking employment but not currently working.

Government employment was down 3,800 and private-sector employers shed 6,100 jobs, according to the Minnesota Department of Employment and Economic Development (DEED).

“September’s employment picture is a reminder that economic recoveries are uneven,” said DEED Commissioner Dan McElroy.

In a teleconference with reporters, McElroy and Steve Hine, DEED Labor Market Information Office director, described the large job losses in September as disappointing and surprising.

Some good news came in the numbers, with the battered construction sector gaining 3,100 jobs, its best showing since April 2005, and manufacturing adding jobs for the fourth consecutive month (up 1,300). McElroy said that job losses occurred in areas that had previously been strong, such as education, health care and leisure.

While warning that “it is way premature to say there’s the start of turnaround” in construction employment., McElroy pointed out that the growth came in specialty trades, indicating a pickup in remodeling, not in heavy construction or civil engineering which have been driven by government stimulus-funded projects in the past.

Describing it as “a really big deal,” McElroy pointed out that the average work week is up almost an hour from 32.2 hours in September 2009 to 33.1 hours in September 2010, which is the equivalent of about  60,000 more jobs in terms of economic buying power.

Pointing out that Minnesota’s employment has risen 1.1 percent, or 27,700 jobs, from the low point of the recession in September 2009, both officials suggested they expect job growth to resume in the coming months.

McElroy said that manufacturing employment is up 2.9 percent, or nearly 9,000 jobs, from a year ago and is “close to pre-recession levels.” He said manufacturing employment is driven in part by exports, pointing to Minnesota’s 19 percent growth in exports to $4.3 billion reported for the second quarter.

McElroy also said he anticipates “perhaps substantially more” seasonal hiring than a year ago related to the yearend holiday shopping season both in the retail and transportation sectors.

Other sectors that added jobs were trade, transportation and utilities (up 1,400), information (up 900) and financial activities (up 200).

Job losses occurred in professional and business services (down 4,000), government (down 3,800), leisure and hospitality (down 3,500), education and health care (down 2,900), other services (down 2,500), and mining and logging (down 100).

In the past year, employment in Minnesota has grown by 1.1 percent, compared with a U.S. growth rate of 0.2 percent.

Nationwide, total nonfarm payroll employment edged down in September, and the unemployment rate was unchanged at 9.6 percent, as government employment declined 159,000, partially offset by a modest increase of 64,000 in privates sector employment. Government employment declines reflected both a drop in the number of temporary jobs for the census and in local government jobs.

Separately, the Bureau of Labor Statistics reported Wednesday that average hourly earnings nationwide fell 0.1 percent from August to September, adjusted for inflation, but rose 0.5 percent, compared with a year ago.  Average hours worked remained unchanged at 34.2 hours from August but rose from 33.8 hours in September a year ago.

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