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Returning state workers drive employment gains; private sector adds jobs, too

Minnesota’s returning state workers drove positive employment gains in today’s jobs numbers, as did private-sector growth last month.

The state added 28,400 jobs in August, and the seasonally adjusted unemployment rate remained unchanged at 7.2 percent, according to the Minnesota Department of Employment and Economic Development (DEED).

But private-sector job growth of 5,800 and a three-year low in initial claims for unemployment insurance benefits were positive notes to the report, noted DEED commissioner Mark Phillips.

“Job growth in the private sector continues to be a bright spot of the Minnesota economy,” Phillips said in a prepared release. “We have seen state manufacturers, construction companies and other private businesses add more than 42,000 jobs in the past four months.”

Phillips also noted that initial claims for unemployment insurance benefits fell to 19,625 in August, the fewest in Minnesota in three years.

Nationally, in contrast to Minnesota, the U.S. Department of Labor (DOL)  this morning reported that initial claims for unemployment benefits rose by 11,000 to a seasonally adjusted 428,000, well above what economists have designated as the significant 400,000 threshold. The four-week moving average was 419,500, an increase of 4,000 from the previous week’s revised average of 415,500, according to the DOL.

Along with state government, other Minnesota sectors that gained jobs last month were trade, transportation and utilities (4,100), construction (2,200), education and health services (1,400), manufacturing (1,200), and professional and business services (700).

The construction industry has added 7,500 jobs in the past four months, the first gain in jobs during the summer construction season since before the housing crash in 2006.

Job losses occurred in Minnesota last month in leisure and hospitality (3,300), financial activities (200), other services (200) and information (100). Mining and logging was unchanged.

Other economic news this week drew a mixed picture both for the state and the nation.

Minnesota exports continued to set records for the state, growing 12 percent to $5.3 billion worth of agricultural, mining and manufactured products. But that level still lags the national export growth rate of 18 percent, according to DEED.

While North America and Asia accounted for 69 percent of total exports in the quarter, with growth rates matching or exceeding the national average, exports to Europe fell 4 percent to $1.1 billion as the European Union’s economic woes continue to burden those economies.

Exports of machinery, the   largest category, totaled $1.029 billion. That was down 2 percent from a year ago, compared with 14 percent growth nationwide. Within the category, “electrical machinery” jumped 22 percent to $698 million, driven by growth in export of industrial furnaces, semiconductors and telecommunications equipment.

 The state’s second-largest export category, which includes medical devices, fell by less than 1 percent to $729 million, “a relatively encouraging sign, given the quarterly slide in medical exports since the first quarter of 2009,” DEED reported. Medical exports were up sharply to China  (15 percent to $76 million), Canada (25 percent to $58 million) and South Korea(62 percent to $27 million).

Minneapolis-based Ceridian Corp. released its monthly index of over-the-road movement of goods across the nation’s highways that showed continued sluggishness in industrial production.

The Ceridian-UCLA Pulse of Commerce Index (PCI), issued earlier this week by the UCLA Anderson School of Management, fell 1.4 percent in August on an adjusted basis, following a 0.2 percent decline in July, “suggesting GDP growth of 0.0 to 1.0 percent,” according to Ed Leamer, chief economist for PCI.

“The August number supports the pattern of sluggish economic growth coming out of a recession, which is something that we’ve seen in the past,” said Leamer, who is also director of the UCLA Anderson Forecast. “What we’re experiencing is the ‘new normal,’ where the U.S. economy will continue to stumble forward until a new growth engine is identified. Essentially, the economy is in need of an innovation burst.”

The index captures real-time fuel sales data from Ceridian’s payment-card servicing business for fleet trucking.

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