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Minnesota’s Unemployment Rate Improves to 3.7 Percent in May

Minnesota’s Unemployment Rate Improves to 3.7 Percent in May

This was despite the elimination of 7,200 jobs across the state.

Despite eliminating 7,200 jobs in May, unemployment in Minnesota improved by one-tenth of a point to 3.7 percent, according to seasonally adjusted figures released Thursday by DEED, the state’s economic development agency.
 
The state still beats the national rate by 0.6 percent.
 
“Minnesota is outpacing the nation in job growth, with all 11 major industrial sectors seeing gains over the past year,” said DEED commissioner Shawntera Hardy, in a statement.
 
Most of those sectors, however, lost jobs last month. The government and construction industries led the way with job counts falling by 2,600 in each. Next was professional and business services (down 2,100), followed by trade, transportation and utilities (down 1,900), financial activities (down 500), information (down 400) and education and health services (down 100).
 
Employment in the leisure and hospitality sector remained flat, while the number of logging and mining jobs grew by 100, as did manufacturing (up 800). Yet, the biggest gain came from the catchall sector, “other services,” which added 2,100 jobs in May.
 
In total, local employers have added more than 48,000 jobs over the past 12 months, an increase of 1.7 percent. Job growth nationally is up just 1.5 percent during the same period.
 

So we lost jobs, but unemployment improved?

 
A number of factors, including warm weather, can affect the state’s unemployment rate.
 
Determining that percentage involves the counting of who is actively looking for work and who isn’t, along with who is on a business payroll.
 
However, as Steve Hine, director of DEED’s labor market office, explains: “It’s not necessarily the case where, for example, a person leaves a payroll and is out looking for their next job.”
 
In Minnesota, about 10 percent of the labor force is multiple job holders. “So if an individual leaves one of their jobs and not the other,” Hine said, “they don’t necessarily move into unemployment.”
 
For example, as construction work picks up once the snow has melted, a number of individuals may shift full-time into a construction gig.

“Or somebody that starts their own business may reduce the number of people that are unemployed, but they don’t show up on a business payroll anywhere,” Hine said, noting that altogether these changes can be small in the grand scheme. “The three months prior to May—February, March, April—is one of the strongest spans that we have on record. So a lot of the decrease [in new jobs] that we are seeing in May is really just a matter of the timing of when seasonal increases occurred in many of those industries.”