MN Jobless Rate Edges Up Again as State Loses 200 Jobs

Minnesota employers collectively lost 200 jobs in March, due in large part to the government sector cutting 1,800 jobs; the private sector, meanwhile, added 1,600 jobs during the month, likely fueled by strengthened consumer spending.

Minnesota's unemployment rate climbed another 0.1 percent in March to a seasonally adjusted 5.8 percent, according to data released Thursday by the Minnesota Department of Employment and Economic Development (DEED).

The uptick in the jobless rate occurred as the state's employers collectively cut 200 jobs. Those losses were driven by the government sector, which lost 1,800 jobs during the month.

Meanwhile, the private sector added a net 1,600 jobs in March. It has now regained 88,000 jobs-or about 58 percent-of those lost during the recession.

Minnesota's unemployment rate remains significantly lower than the national average, which was 8.2 percent in March.

But there are signs of slowing momentum: March marks the first month since November that the state's employers have collectively lost jobs.

March is also the second consecutive month that the state jobless rate has increased. In February, the state added 5,800 jobs-revised downward from the originally reported 6,200 jobs-as the unemployment rate climbed 0.1 percent to 5.7 percent. The uptick in February followed many months of the unemployment rate either dropping or holding steady.

Still, DEED Commissioner Mark Phillips said in a statement that “the underlying fundamentals of the economy remain strong.”

During a Thursday conference call, Labor Market Information Office Director Steve Hine echoed those sentiments, saying job openings posted online jumped 6.3 percent in March, and Minnesota fares among the best states in the country with respect to its ratio of online job postings to its unemployed. Another positive indicator: Initial unemployment claims decreased during the month.

The trade, transportation, and utilities sector-which includes retailers-added 2,500 jobs in March, the most of any industry. In fact, March represented the largest one-month gain on record for the sector and brings the sector's employment up to a three-year high. Hine said the growth is likely spurred by strengthening consumer spending.

The leisure and hospitality sector-which, along with government, is the only sector that has experienced year-over-year job losses-also showed signs of strengthening in March, adding 1,200 jobs.

Education and health services added 200 jobs during the month.

Hine cautioned, however, that some of the growth seen early this year may be attributable to the unseasonably warm weather, which has prompted some sectors, including construction, to move up hiring that typically occurs later in spring. The leisure and hospitality industry, which includes recreation businesses like golf courses, may also have been positively affected by the warm weather, Hine said.

“We have to watch to see if it's a temporary blip related to weather” or a permanent change driven by stronger consumer spending, Hine said.

In addition to the 1,800 jobs cut in the government sector, manufacturing lost 1,000 jobs, mostly in the “nondurable” segment, which includes food manufacturing, Hine said. Other losses occurred in construction (500), professional and business services (300), other services (300), information (100), and logging and mining (down 100). The financial activities sector held steady during the month.