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Minnesota unemployment rate falls to 6.4%, but 6,100 jobs lost

Minnesota’s jobs picture continues to send contradictory signals, with the state’s October unemployment rate falling half a percentage point to 6.4 percent even while 6,100 jobs were lost.

The figures were released today by the Minnesota Department of Employment and Economic Development (DEED) The U.S. unemployment rate, meanwhile, stands at 9 percent for October.

“Another confusing month” is how Steve Hine, DEED’s director of Labor Market Information office, tried to explain the contradictory moves.

In a conference call with reporters, Hine said the large drop in October’s unemployment rate, which is statistically “smoothed” over several months, resulted from the return of furloughed state workers after the government shutdown last summer. Even without that smoothing effect, the unadjusted rate, based on a door-to-door survey of households, fell 0.2 percentage points.

But a separate survey of employers found a decline in the number of people on their payrolls. While the drop was significant, Hine pointed out that monthly payroll data had been revised upward by 18,000 jobs since July, including a 5,500 boost in September, as more complete survey data became available.

Hine indicated that October’s drop is also subject to future revisions.

Employers reported the average work week increased 0.4 hours to 33.9 hours, the highest level since June 2008 and temporary employment is just below its all-time peak before the recession. In addition, initial claims for unemployment benefits remained below 25,000 for the third straight month. These numbers all indicate positive demand for labor in the state, Hine said.

The construction sector gained 1,700 jobs in October, pushing construction employment to its first year-over-year job growth in five and a half years. From its peak in early 2006, construction employment has fallen more than 40 percent, losing 53,200 jobs by the time it reached bottom last April. Since then, the sector has gained back only 7,500 jobs.

Professional and business services led all sectors in October with a gain of 2,200 jobs, with the information sector up 500.

Job losses occurred in education and health services (3,000), leisure and hospitality (2,000), financial activities (1,600), trade, transportation and utilities (1,500), other services (1,000), government (800) and manufacturing (600).

Employment in the state’s public schools has fallen 1.7 percent from a year ago to 137,925, the lowest level since 1997, Hine said. Local government education employment peaked in 2000 at 144,200, Hine said.

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