State Jobless Rate Dips to 6.4% But 6,100 Jobs Lost

Minnesota lost about 6,100 jobs during the month, but some sectors that have been struggling, including the construction industry, saw year-over-year gains.

Minnesota's official unemployment rate dropped 0.5 percent to a seasonally adjusted 6.4 percent in October, and it remains significantly lower than the national average of 9 percent, according to data released Thursday by the Minnesota Department of Employment and Economic Development (DEED).

Despite the positive news of the declining unemployment rate, Minnesota lost about 6,100 jobs during the month, according to DEED. Those losses were offset to some extent by a downward revision of September job losses from 7,400 to 1,900. The official unemployment rate was 6.9 percent in September.

Labor Market Information Office Director Steve Hine told Twin Cities Business on Thursday that the unemployment rate and job loss data are derived from different sources, so it's not surprising that they sometimes indicate contrasting trends-like a loss of jobs coupled with a decrease in unemployment. But the past year's data, he said, depicts a positive trend, with payroll jobs up and unemployment down.

A new method was adopted last year for calculating the unemployment rate, and it is meant to remove some job volatility and “smooth out” the employment rate over time, lessening the impact of major events like July's state shutdown, which temporarily put 22,000 state employees out of work.

Hines said Thursday that for the October employment data, the “smoothing is playing less of a role, but it's still a pretty significant role,” despite the fact that it's been three months since the shutdown. He said that of the 0.5 percent drop in the official unemployment rate, 0.2 percent was “real improvement,” while the other 0.3 percent can be attributed to “the lingering effect of the shutdown.”

He projected that the state's “unsmoothed rate” for October was actually 6 percent, down from an unsmoothed 6.2 percent in September.

DEED Commissioner Mark Phillips pointed out that the state's official jobless rate is at its lowest level since November 2008. “We're pleased to see continued improvement in some of the sectors that were hit the hardest by the recession, particularly construction,” he said in a statement.

Several industries saw employment gains during the month-and October marked the first time since April 2006 that jobs in the state's construction sector were up year-over-year.

The professional and business services sector added the most jobs in October (2,200), followed by construction (1,700), and information (500).

The mining and logging industry held steady for the month, while the following industries shed jobs: education and health services (down 3,000), leisure and hospitality (down 2,000), financial activities (down 1,600), trade, transportation, and utilities (down 1,500), other services (down 1,000), government (down 800), and manufacturing (down 600).

During the past 12 months, the professional and business services sector has added 6,500 jobs, the most of any sector. Government has lost the most jobs; it's down 3,100.

Of the state's largest metropolitan areas, Mankato has experienced the largest gain in jobs, up 2.8 percent. Rochester is up 1.7 percent, while the Minneapolis-St. Paul metro area is up 1.2 percent. St. Cloud and Duluth-Superior have both lost jobs, down 1.3 percent and 0.5 percent, respectively.