If you are one of the more than 2.6 million Minnesotans who have held onto jobs during this recession, you already know that economic pain is not spread evenly.
Without suffering the upheaval of a job loss, the most secure workers have been free to enjoy the benefit of deep discounts at the malls, rock-bottom interest rates and government rebates on everything from cars to windows. Granted, your share of the pain could be hefty — even while you held a job — if the measure is your sunken 401(k).
Analysts have a myriad of ways to slice and dice this recession and its impacts. They’ve come up with a few bright lines and several blurry ones to help draw the picture of which Americans have taken the heaviest hits and whether the economy is moving reliably toward recovery — finally.
Let’s look at a few of those lines.
Education defines differences
It turns out education cuts a sharp, clear line. In a teleconference with reporters announcing Minnesota’s brightening job scene on Thursday, Dan McElroy, the state’s commissioner of Employment and Economic Development, pointed to a remarkable set of statistics in that regard.
For workers who lacked so much as a high school diploma, the nationwide unemployment rate was 14.7 percent in July, according to the U.S. Bureau of Labor Statistics (BLS). (This snapshot is of the civilian population 25 and older.)
Compare that less-educated group with workers who held a bachelor’s degree or higher. Their July unemployment rate was 5.3 percent. Even some college credits made a dramatic difference. The July jobless rate was 8.2 percent for those with some college or an associate’s degree.
The overall national rate for the month was 9.4 percent, exactly the same as that for workers with a high school diploma.
No wonder laid-off workers and returning war veterans are crowding classes at Minnesota’s colleges, universities and technical schools.
McElroy said the BLS report tells us “we have both work and opportunity” in terms of meeting the demand for education and training that could help the state recover from this recession and fortify it against future downturns.
Manufacturing less clear across states
The lines are not so clear when you break down national numbers state by state, especially looking for recovery in manufacturing, a sector economists watch in Minnesota because it is so crucial to the well being of many parts of the state.
Hard-hit Michigan has led the nation’s unemployment for 26 of the past 27 months. Like Minnesota, its rate fell slightly in July. Still, Michigan’s rate stood at 15 percent compared with 8.1 percent for the Gopher State.
Tens of thousands of workers lost jobs in Michigan’s auto industry this year. Once seasonal adjustments were made, July brought no real sign of recovery in the state that was once the nation’s manufacturing powerhouse, said Rick Waclawek, director of labor market information for the Michigan Department of Energy, Labor and Economic Growth.
Nationwide, manufacturers shed 52,000 jobs in July.
Minnesota bucked the trend, gaining 1,700 manufacturing jobs.
Some of the state’s gains came in wood products: companies that make kitchen cabinets, windows and similar items. Those manufacturers took a painful wallop after the mortgage lending crisis shut down home construction. Now, the July numbers suggest they may have turned a corner.
It’s a modest step, given that the state lost 38,900 manufacturing jobs over the past year.
“We still are not seeing the kind of increases we would like to see or across as many sectors,” McElroy said.
Still, he cited the gain as reason for guarded optimism when he briefed reporters on the latest numbers this week. It would take two or three more months of gains to make a real trend toward job recovery, he said.
Up and down indicators
Even with July employment gains in Minnesota and the nation, the line toward real recovery remains shaky and blurry.
On Thursday, as Minnesota’s analysts were announcing the state’s first month-by-month job gains in a year (up 10,300 jobs in July), national news wires hummed with contrary information.
The number of U.S. workers filing new claims for unemployment benefits unexpectedly rose last week, fanning new worries of an anemic recovery, Reuters reported.
Initial claims for state unemployment insurance benefits rose 15,000 to a seasonally adjusted 576,000 in the week ended Aug. 15, the Labor Department said. Analysts polled by Reuters had forecast new claims slipping to 550,000 rather than rising.
“I think that we’re hoping for the numbers to stay below 600,000, and not until we get below 500,000 can we be more certain that there is an economic recovery,” Linda Duessel, market strategist at Federated Investors in Pittsburgh told Reuters.
The surprising spike in new claims last week revived fears that consumer spending will be too tepid to drive the recovery.
Another fear is that stubbornly high unemployment rates will drive more foreclosures, according to the Washington Post.
Economists estimate that 1.8 million borrowers will lose their homes this year, up from 1.4 million last year, the Post said, citing data from Moody’s Economy.com.
During the first three months of this year, the largest share of foreclosures shifted from subprime loans to prime loans. The change to prime loans — traditionally considered safer — reflects the growing numbers of unemployed who are being caught up in the foreclosure process.
Even Minnesota’s encouraging July jobs report, included hints that companies aren’t ready to believe the nation truly has begun to pull up from the bottom.
A key indicator is whether companies have started hiring temporary help. Across sectors — manufacturing, health care, financial services and others — companies count on temp hires to maintain better control over fixed costs and buffer their full-time workforces against economic ups and downs.
But Minnesota’s temporary help market remains weak, McElroy said.
“We see temporary help go down early in a recession, and economists tell us we should expect it to go up early in a recovery,” he said. “We haven’t seen dramatic movement yet.”
Some agencies say they are starting to talk with more companies, he said, “but we are not there yet on that indicator.”
Sharon Schmickle writes about national and foreign affairs and science. She can be reached at sschmickle [at] minnpost [dot] com.