MN Lost 4,200 Jobs In July While Jobless Rate Held Steady

MN Lost 4,200 Jobs In July While Jobless Rate Held Steady

Seasonally adjusted employment figures paint a fairly dismal picture, although state officials warn that the adjustment process is concealing some strength in Minnesota’s labor market.

State officials said Thursday that Minnesota employers shed a seasonally adjusted 4,200 jobs in July. Meanwhile, they also revised June’s numbers downward by 3,600 jobs.

That means that, year-to-date, Minnesota has added a meager 2,900 jobs, or about 400 per month, on an adjusted basis.

During July, the education and health services sector lost 5,300 jobs. Information shed 1,000; construction, 700; financial activities, 200; and government, 100.

The sectors that added jobs: trade, transportation, and utilities (up 1,600); manufacturing (700); leisure and hospitality (600); and other services (200). Logging and mining, and professional and business services held steady.

But state officials also say that significant discrepancies between seasonally-adjusted and non seasonally-adjusted job numbers are calling into question the adjustment process. And they insist that other indicators suggest a more robust Minnesota labor force.

Adjusting for “Normal” Seasons

Steve Hine—research director for the Department Labor Market Information Office of the Minnesota Department of Employment and Economic Development—said Thursday that “employment conditions did weaken significantly in July,” when looking at seasonally adjusted figures. But “by digging into the numbers a bit more deeply . . . I have to conclude that our job growth and employment strength is considerably greater than these numbers reveal.”

In fact, when looking at raw, unadjusted numbers, the state has added more jobs during the past seven months than Minnesota has seen in decades during the comparable period.

The seasonal adjustment process involves looking at respective months in recent years, identifying normal employment patterns in each industry, and then adjusting the raw numbers to account for those typical ebbs and flows. But Hine said that recent years have been anything but “normal”—and Minnesota’s volatile weather and changes to school years are skewing numbers.

For example, the education and health services sector lost a seasonally adjusted 5,300 jobs in July, the largest loss on record. But Hine said that the losses were driven by cuts in private education, whose layoffs were lower than usual in June but higher than typical in July. That shift in timing had a significant impact on the seasonal adjustment, Hine said. (Still, the aggregate decline in that sector over past three months is slightly higher than in past years.)

State officials said that their findings “lessen confidence that Minnesota’s seasonally adjusted estimates are accurately reflecting recent trends in job growth.”

Other Indicators

Minnesota’s unemployment rate, which is based on a separate set of data, remained unchanged in July at 4.5 percent, below the national rate of 6.2 percent.

But Hine said that Minnesota’s figure reflects another decline in the state’s labor force participation rate, which fell to 70.1 percent. That drop in the portion of Minnesota’s working-age residents who are working or seeking work reflects “the impact of an aging demographic,” Hine said.

One positive forward-looking indicator: Online job postings rose by 4,400 in Minnesota in July, a greater uptick than was seen in any other state with the exception of Pennsylvania.

During the past year, Minnesota has gained a seasonally adjusted 68,344 jobs, representing a 2.5 percent growth rate, compared with a U.S. growth rate of 1.9 percent during that period.
But Minnesota’s rate of growth for the private sector is actually lagging the national average.

But Minnesota’s “surge in over-the-year growth is likely to be short-lived” when August’s figures are released, because the latest data is largely reflective of “an even weaker jobs report last July,” said Hine.


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