MN’s Jobless Rate Hits Lowest Point In Nearly 6 Years

Minnesota’s unemployment rate dropped to 4.8 percent in October, a rate last seen in January 2008; a declining labor force participation rate, however, has contributed to the trend.
MN’s Jobless Rate Hits Lowest Point In Nearly 6 Years

Minnesota employers shed jobs in September but rebounded in October, while Minnesota’s unemployment rate ticked down during both months, state officials said Thursday.

In fact, the state’s jobless rate has hit its lowest level in roughly six years—although the decline may be attributed in part to waning labor force participation.

The Minnesota Department of Employment and Economic Development (DEED) released two months worth of jobs data this week. The agency had been forced to postpone the September jobs report due to partial federal government shutdown.

The state lost 8,700 jobs in September and added 9,900 jobs in October, resulting in a net gain of 1,200 jobs over the two-month period.

September’s losses were largely the result of one sector, professional and business services, which lost 6,700 jobs. In a Thursday conference call, Steve Hine, research director of DEED’s Labor Market Information Office, said he found that decline “surprising.” Most of the losses were concentrated in administrative services, but he said he’s “hard-pressed” to explain what drove the decline.

The state rebounded in October, however, more than offsetting September’s losses. The three sectors that led the growth were education and health services (up 5,200 jobs), manufacturing (3,900), and construction (1,200).

Meanwhile, Minnesota’s unemployment rate dipped during both months. In September, the state’s jobless rated ticked down from 5.1 percent to 5 percent, and it fell to 4.8 percent in October. Minnesota continues to fare much better than the national average on that metric: The U.S. unemployment rate was 7.2 percent in September and 7.3 percent in October.

DEED Commissioner Katie Clark Sieben said in a statement that Minnesota’s unemployment rate “has fallen to the lowest level in nearly six years, which highlights the continued strength of the labor market.”

The last time Minnesota’s unemployment rate was 4.8 percent was December 2007 and January 2008. But Hine pointed out that a decline in the state’s labor force participation rate has contributed to the falling jobless rate.

In December 2007, Minnesota’s labor force participation rate was 72.1 percent; this October, it totaled 70.1 percent. While the state’s overall work force has grown during that period due to population growth, the declining participation rate translates to 84,000 fewer labor force participants than Minnesota would otherwise have, Hine said. In other words, a smaller portion of Minnesotans are employed or actively seeking employment. Changing demographics are a key reason for the drop in participation, according to Hine.

“It’s certainly a factor contributing to our declining unemployment rate, but the job growth we’ve experienced” is the primary driver, he added.

Over the past year alone, Minnesota has added nearly 50,000 jobs, growing at a rate of 1.8 percent and slightly outpacing the national growth rate of 1.7 percent.