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Job growth has ground to a halt in Minnesota

photo of mississippi river in minneapolis
In recent months, the Minnesota isn’t creating a net gain of new jobs.

The state of Minnesota boasts a historically low unemployment rate which has held at 2.8 percent — the lowest since May 1999 — for four straight months. But behind that number there are troubling signs about Minnesota’s job market: job growth in the state has stalled out. In recent months, the state isn’t creating a net gain of new jobs. Over the last five months of 2018, the state actually lost jobs.

A closer look at statistics from the Minnesota Department of Employment and Economic Development (DEED) finds that over the five-month period from August to December 2018, the state actually lost 800 jobs in the aggregate.

“We’ve been pretty flat since July,” said Steve Hine, director of DEED’s Labor Market Information Office, of the numbers for the August to December period of last year.

“We saw incredibly strong growth over the three months prior to that and we’re at a rate of unemployment that strongly suggests that we might just be seeing the constraints of a lack of available workforce,” said Hine.

May, June and July 2018 were robust months for job creation in Minnesota. Over those three months from May to July, DEED reports that the state added a total of 31,700 jobs — averaging more than 10,000 new jobs per month. The May to July job gains account for 98.4 percent of total job gains for the entire year. The other nine months of the year (January to April and August to December) added a combined grand total of just 500 jobs.

In recent years, health care has often been a strong sector for job creation. But during 2018, some health care categories lost jobs.

Employment at nursing and residential care facilities dropped 3.1 percent, a loss of about 3,400 jobs during 2018. Employment in the ambulatory health care services sector — outpatient clinics — declined 1.3 percent, a loss of approximately 2,000 jobs for the year.

Hine called the job losses for ambulatory health care services “very surprising.” But he noted that employers across the state are having trouble finding workers.

Other categories that saw notable declines in 2018 included truck transportation (down 7 percent), colleges, universities and professional schools (down 7.1 percent), services to buildings and homes (down 6.8 percent), employment services (down 2.1 percent) and accounting, tax, bookkeeping and payroll services (down 2.1 percent).

twin cities business magazine logoIndustries posting strong gains included construction (up 6.7 percent), leisure and hospitality (up 4.6 percent) and manufacturing (up 2.2 percent).

DEED reports employment statistics every month, but often revises the monthly counts. The numbers are seasonally adjusted, a statistical technique used to prevent predictable, seasonal-only jobs from skewing the overall employment statistics. The current tally is based on the most up-to-date labor numbers from Hine, but the statistics aren’t final yet.

“These will all be revised with our next release… at the end of the year, we revise the entire year,” said Hine of the employment statistics for 2018.

Most economists are forecasting slower growth for 2019. The Consumer Confidence Index declined in both December and January. The latest Wells Fargo/Gallup Small Business Index saw a drop in the optimism of small business owners for their companies in the year ahead. Recent stock market volatility and concerns about global economic trends are prompting more uncertainty about the economy.

“It’s going to be an interesting year. If there is a consensus it is that the economy is due for somewhat of a slowdown,” said Hine of prospects for 2019. “I will not be at all surprised if I see our rate of job growth diminish.”

Month Minnesota Jobs Added or (Lost)
January + 4,900
February (- 200)
March + 400
April (- 3,800)
May + 10,700
June + 9,900
July + 11,100
August (- 2,500)
September + 500
October + 2,500
November (- 1,800)
December + 500
Total + 32,200

This article is reprinted in partnership with Twin Cities Business.

Comments (7)

  1. Submitted by joe smith on 02/09/2019 - 08:33 am.

    Unfortunately for Minnesota we are not producing enough skilled, quality. Educated workers. To work for “company A” you, as a worker, have to bring value to the company. If you don’t bring value, you are of no use to that company. No one “owes” you a job or a “living wage”. There is an agreement between a worker and whatever business they work for, you bring value, you get paid.
    Too many 18 year old kids don’t hear this at home (everybody is busy being the victim) and they surely don’t hear it in 13 years of public schooling. Every business wants quality workers and will pay for them.

    • Submitted by richard owens on 02/12/2019 - 04:12 pm.

      Question: Is the purpose of education to prepare individuals for a job?

      In the case of vocational or employer-sponsored supplemental classes, of course that would be YES.
      In the case of a medical school or law school, again, the answer would be YES.

      But in a social sense, education cannot be confined to building better workers, when human development itself is the goal. Learning HOW to learn, how to THINK, how to take one’s own development into one’s hands- these are the real goals of education we as a state must try to provide our students.

      As for the lazy, unmotivated, good-for-nothing slackers out there, well, one wise employer once told me, “The perfect employee NEVER walks through that door.” Judging the talent should be done by the best coaches, not those who have lost faith in a generation.

      Hewlett-Packard (when the founders were still on the board) built whole new facilities and hired people they did not expect to be financially contributing for at least a year. They also built daycare centers with their plants. The philosophy is one still practiced by well-managed companies.

  2. Submitted by Paul Udstrand on 02/09/2019 - 01:51 pm.

    How many of these lost jobs are associated with lost farm income and trade? A net loss of 800 could easily be associated depressed crop sales foreign trade during that period. You have to remember something like 80% of the “agricultural” jobs in MN are actually located in the twin cities, the planting and harvesting of crops is just one link in the supply chain. When tons of crops are sitting around in storage instead of being sold and moved out, that ripples through the entire supply chain.

    • Submitted by Frank Phelan on 02/10/2019 - 07:41 am.

      The new tariffs have not just played havoc with Ag, but also for steel users.
      And since some of our taconite has gone to Canada in the past, reduced imports of Canuck steel may well reduce demand for our taconite.

      Oh what a tangled web we weave when we at first practice to protect.

  3. Submitted by Dennis Wagner on 02/09/2019 - 09:19 pm.

    The telling tale is in the economists opinion. “Most economists are forecasting slower growth for 2019.” “It’s going to be an interesting year. If there is a consensus it is that the economy is due for somewhat of a slowdown,” So what can be drawn from this, we don’t know, is it state wide, industry wide, are the cities and the counties, state etc. cutting back on their infrastructure budgets,road repair etc. lowering their borrowing because interest rates have gone up, Do we have industries tied to export, what countries, are those countries slowing down? What have the tariffs done to value add manufacturing? Word is lending has also slowed down. Few jobs here a few jobs there before you know it you have a slow down.

    • Submitted by Dennis Wagner on 02/10/2019 - 09:15 am.

      PS: There are also indicators that the American consumers may be getting closer to maxing out their credit, a CBS article is reporting that the Fed. says we have added another $1T in consumer debt since 2013,

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