MN Adds 15.5K Jobs, Unemployment Rate Dips to 5.6%

The state's employment-driven by the private sector-continued to grow in January; still, government jobs continued their decline, and some of the drop in unemployment may be attributed to decreased labor force participation.

Minnesota added 15,500 jobs in January as the unemployment rate dipped to 5.6 percent, according to data released Thursday by the Minnesota Department of Employment and Economic Development (DEED).

The jobless rate dipped 0.1 percent from December, when the state added 7,900 jobs and the unemployment rate was 5.7 percent. The jobless rate was 5.9 percent in November.

The 15,500 jobs added in January bring Minnesota's year-over-year job gains to 29,000, but the state's job growth of 1.1 percent since January 2011 lags the U.S. average of 1.5 percent.

Still, as in months past, Minnesota's jobless rate remains well below the national average, which was 8.3 percent in January.

“Robust job growth in January points to an economy that is gaining momentum,” DEED Commissioner Mark Phillips said in a statement. “The private sector has been particularly strong, adding 27,200 jobs in the past two months alone.”

In a Thursday conference call, Labor Market Information Office Director Steve Hine described January's job growth as “very strong.”

He acknowledged that the decline in the unemployment rate can be attributed in part to further decline in the labor force participation rate, as the state's work force shrank by about 5,000 jobs between December and January. (The unemployment rate represents the percentage of people actively seeking work compared with those in the labor force.)

“There continues to be high unemployment-especially long-term unemployment,” Hine said, adding that some of the decline in work force participation stems from discouragement, while some may be attributed to the retirement of Baby Boomers.

During January, professional and business services led all sectors with the addition of 5,600 jobs. Other gains occurred in education and health services (up 4,100), manufacturing (up 2,400), information (up 1,400), other services (up 800), and mining and logging (up 100).

The construction sector also gained 4,200 jobs in January when adjusted for seasonality. Hine said the industry lost jobs during the month, but about 4,200 fewer than are typically lost during the season. The mild weather in January may have positively affected the sector, he added.

There are several other indicators that the state's economy is improving-including a recent DEED report that found that job vacancies during the fourth quarter of 2011 were up about 47.6 percent from the same period in 2010.

Also, there was a minor gain in the number of hours worked per week and an improved ratio of job seekers to job openings in January.

Government was the only sector down “substantially” during the month, Hine said. That sector lost 1,700 jobs during the month. The other sectors that lost jobs in January were leisure and hospitality (down 600); trade, transportation, and utilities (down 400); and financial activities (down 400).

Hine said that leisure and hospitality is “not doing very well relative to the rest of the economy, or even in absolute terms,” as it has lost jobs for seven consecutive months. The mild winter may have been detrimental to the industry, he added.

DEED also released new “benchmark results” based on an annual revision of employment data by the U.S. Bureau of Labor Statistics. The revisions found that Minnesota regained 59,400 jobs between the trough of the recession in September 2009 and December 2011-up from the previous estimate of 45,600 jobs.

Including January's job gains, Minnesota has regained roughly 74,900 jobs since the recovery began, representing about 48 percent of the 156,300 jobs lost during the recession, according to Hine.