Minnesota Loses Jobs, But Unemployment Rate Declines in November
Happy days are here again? Not quite.
For the month of November, Minnesota’s unemployment rate dropped to 4.4 percent, down from 4.6 percent in October. After several months of declines, the state’s labor participation rate ticked back up to 67.9 percent for November. Those are encouraging signs.
But at the same time the state lost 12,600 jobs over the month – the first drop since April.
If Minnesota is losing jobs, how can the unemployment rate be declining at the same time?
The disconnect is due to the fact that the numbers in the monthly overview are pulled from two different surveys. One is a payroll survey which tracks payroll jobs but does not count self-employed workers. The second is the national Community Population Survey. Under the CPS, people are counted as employed if they worked as little as a single hour during the survey week. One possible explanation is that while payroll jobs dropped, self-employed workers and independent contractors may be getting busier again.
“The more challenging news is that we did lose jobs in November,” said Steve Grove, commissioner of the state’s Department of Employment and Economic Development.
DEED’s numbers showed a loss of 10,300 private sector jobs in November, as well as a drop of 2,300 government jobs.
“Big picture here, our recovery is not going to be linear,” said Grove. “The best way for us to get those jobs back in our state is for people to stay safe so we can regain that consumer confidence.”
There are a few rays of light in the darkness. Oriane Casale, interim director of DEED’s Labor Market Information Office, noted that jobs in the food manufacturing sector are up 3.9 percent compared to a year ago.
When the first wave of Covid hit, the state’s unemployment rate hit 9.9 percent in May. As the recovery is sputtering, the state is seeing an increase in unemployment filings again.
“We are seeing an increase in unemployment insurance — both applications and weekly benefit requests,” said Grove, who added those numbers are driven by both seasonal factors and the increased number of Covid cases hitting Minnesota.
Minnesota has seen more than 1.1 million applicants for unemployment insurance since mid-March.
“Clearly we need help from Washington,” said Grove, in reference to a potential new federal stimulus package. “There’s no question that the real substantial help will come from the federal government.”
Yesterday, Gov. Tim Walz signed a $217 financial relief package for Minnesota businesses, though he and lawmakers have said it’s designed to serve as a stopgap until federal aid comes through.