Minnesota’s unemployment dropped to its lowest level since December 2008 — a seasonally adjusted 6.7 percent in January — despite anemic job growth of 2,000.
The rate was 0.2 percent below December’s revised 6.9 percent unemployment rate, according to figures released today by the Minnesota Department of Employment and Economic Development (DEED).
The U.S. unemployment rate was 9 percent in January for the second month in a row.
DEED Commissioner Mark Phillips described January’s report as showing “a slow but steady improvement in the Minnesota labor market.”
He noted: “While the economy continues to face headwinds, we’re seeing a number of positive signs, including growth in temp-help hiring, rising consumer confidence and declining initial claims for unemployment benefits.”
The only sectors posting job losses occurred in trade, transportation and utilities (down 6,700) and government (down 300). Without the large decline tied to retailing, the January growth would have been much stronger, said Steve Hine, DEED director of labor market research.
He also pointed to two positive employment trends: several months of 20 percent-plus year-over-year growth in temporary hiring, which is typically a leading indicator for permanent hiring, and an increase in the number of hours worked.
Assessing the anemic gain of 2,000 jobs in January, Hine said, “I think the underlying forces at play are stronger than that number indicates.”
Hine said the report provides “mixed signals” on the state’s economy.
But he admitted that the labor participation rate typically moves up as unemployed workers return to the job market seeking unemployment. So far, that has not happened. The labor force participation rate actually decline from 71.9 percent in December to 71.7 percent in January.
Education and health services led all sectors, gaining 4,200 jobs in January. Other gains occurred in leisure and hospitality (up 1,800), other services (up 900), financial activities (up 700), logging and mining (up 500), professional and business services (up 400), construction (up 200), manufacturing (up 200) and information (up 100).
Over the past year, the state has gained 16,500 jobs, for a growth rate of 0.6 percent. The U.S. growth rate during that period was 0.7 percent.
This month’s employment data also include benchmarks results — an annual revision of employment data from the previous 21 months. The revisions indicate that the state lost 158,300 jobs during the recession, rather than the 162,200 jobs that were originally reported.
The recovery, however, has been slower than originally reported, with 19,300 jobs gained instead of 33,000 as of December 2010.
The revised data also indicate that the seasonally adjusted unemployment rate peaked at 8.5 percent in both May and June 2009, instead of the originally reported 8.4 percent during those months.