MN Adds More Jobs, Has Regained 90% Lost in Recession
Minnesota employers added 12,100 jobs in January—and the state has recovered nearly 90 percent of the 160,100 jobs that were shed during the recession, according to a report that the Minnesota Department of Employment and Economic Development (DEED) released Tuesday.
Meanwhile, Minnesota’s unemployment rate ticked up 0.2 percent in January to a seasonally adjusted 5.6 percent. (The December unemployment rate was revised down from 5.5 percent to 5.4 percent.) Minnesota’s unemployment rate remains well below the national rate of 7.9 percent in January, which represents a 0.1 percent increase from December.
Steve Hine, director of DEED’s Labor Market Information Office, said during a conference call on Tuesday that the unemployment rate increase occurred largely because of an increase in the labor force participation rate, which edged up 0.1 percent to 70.9 percent. He explained that the number of individuals in the state’s labor force is the highest it’s ever been, and as those who recently entered the work force search for employment, they’re counted among the unemployed—thus it’s “quite common for the unemployment rate to go up even as or because economic conditions start to improve.”
Hine added, “I would hesitate to make much out of a small [unemployment rate] increase like this until we see whether the data continue to support that as a trend.”
In addition to announcing January job figures, DEED said Tuesday that it revised job figures going back 21 months in order to factor in unemployment insurance tax records that recently became available and that are more reliable than the sample-based estimates that DEED uses throughout most of the year. The revisions revealed that the state gained 16,700 more jobs than previously reported—or 70,500 total—between April 2011 and December 2012.
Hine said that 50,029 jobs have been added between January 2012 and January 2013, representing a 1.9 percent job growth rate. The national job growth rate over that period stood at 1.6 percent.
According to Hine, the state has regained 143,200, or 89.4 percent, of the 160,100 jobs lost during the worst of the recession—or between February 2008 and September 2009. (February 2008 represents an all-time employment high before the state started losing jobs the following month, and September 2009 marked the end of a period of consecutive declines before the state starting regaining jobs in October of that year, Hine said.)
The past six months in particular has been a period of strong job growth. During that period, the state has added an average of 7,300 jobs each month. According to Hine, that six-month average figure was surpassed just once in the past 12 years—in 2005—and only by “a couple hundred jobs.”
January’s job gains were strongest in trade, transportation, and utilities, which added 4,100 jobs, followed by construction (2,600), leisure and hospitality (up 1,700), government (up 900), other services (900), education and health care (700), manufacturing (600), information (400), professional and business services (200), and logging and mining (100).
Financial activities, which shed 100 jobs, was the only sector that lost jobs in January.
Over the past year, all 11 industry sectors have added jobs—something that has been true only a few times since 2000, including in October and November of last year, Hine said. Trade, transportation, and utilities led the sectors with 13,300 jobs added since January 2012. It’s followed by education and health services (11,700), government (5,200), professional and business services (5,100), manufacturing (3,400), leisure and hospitality (2,800), construction (2,700), information (2,200), financial activities (2,100), other services (1,100), and logging and mining (200).
When asked if Minnesota has the momentum to withstand federal budget cuts, Hine said: “I think the fact that all of our sectors are up over the year supports the interpretation that our economy is on pretty solid footing when it comes to job growth, but the impact of sequestration is still very uncertain. It certainly presents a threat. Whether it’s a big enough threat or whether the consequences are enough to derail this momentum that we have I think is still an unanswered question.”