MN Jobless Rate Unchanged, But Employers Cut 900 Jobs

The state added government, manufacturing, and construction jobs in May while shedding jobs in the professional and business services, information, and leisure and hospitality sectors.

Minnesota’s unemployment rate remained unchanged in May at a seasonally adjusted 5.6 percent, according to data released Thursday by the Minnesota Department of Employment and Economic Development (DEED).

But based on a monthly survey of roughly 3,000 Minnesota employers, the state lost an estimated 900 jobs during the month.

DEED initially reported that the state shed 3,100 jobs in April, but that figure has now been revised to 900 jobs lost. April’s unemployment rate fell 0.2 percent to 5.6 percent; that slight decline effectively eliminated the modest increases seen in February and March.

Over the past year, the state has gained 22,600 jobs, representing a growth rate of 0.8 percent, according to DEED.

During a Thursday morning conference call, Labor Market Information Office Director Steve Hine said that the state’s job growth rate continues to lag the nation’s, but Minnesota’s unemployment rate remains well below the national average of 8.2 percent.

Government led all sectors last month, adding 1,200 jobs. Hine said that the gain was fueled by non-educational hiring—namely, local recreation, which includes municipal pools and golf courses. Other areas of government, including local education, were actually down in May.

Other gains occurred in manufacturing (up 900); construction (up 800); education and health services (up 300); and trade, transportation, and utilities (up 200). The gain in manufacturing was driven by strength in durable goods, particularly fabricated metals and machinery, Hine said.

The professional and business services sector lost 1,600 jobs in May, the most of any sector. Accounting was particularly weak, while administrative support services—which includes many temporary positions—was strong during the month, according to Hine.

Other sectors that lost jobs in May include information (1,100); leisure and hospitality (700); other services (500); and financial activities (400). Logging and mining held steady.

“Although job growth has flattened in recent months, several sectors in Minnesota are doing relatively well compared with the rest of the country,” DEED Commissioner Mark Phillips said in a statement.

Construction has been the state’s fastest-growing sector during the past year and has outperformed the nation “by a healthy margin,” Phillips added.

Year over year, the following sectors have added the most jobs: education and health services (12,700); professional and business services (12,500); manufacturing (5,400); and construction (up 4,200).

Leisure and hospitality and government have lost the most jobs over the past year, down 10,000 and 3,500, respectively.

Online job postings in May slipped by about 2,000, and the average hours worked per week fell a half-hour to 33.3 hours after having risen in recent months.

The labor force participation rate held steady at 71.1 percent—a level last seen in the early 1980s—after consistently ticking down over the past several months. Hine said the rate reflects “the impact of our aging work force,” but “a lack of strong job growth is continuing to depress our overall participation rate.”

Despite some of those negative indicators, Hine on Thursday said that seasonally adjusted new claims for unemployment fell again in May. And he reiterated concerns about the credibility of the monthly jobs data, which is based on a sample of roughly 3,000 businesses.

Each quarter, DEED receives employment data from approximately 150,000 Minnesota businesses, and that information is used to revise the monthly figures. Based on the most recent quarterly reports, which were submitted to DEED in December, Hine believes the monthly survey is significantly under-reporting the number of jobs in the state.

“We need to see what transpires over the course of the summer to better ascertain the strength of our labor market,” Hine said.