The state's employers cut 6,100 payroll jobs last month, according to the Minnesota Department of Employment and Economic Development.
Still, the long-suffering construction industry added 1,700 jobs. That was the fourth monthly gain in the past half-year.
Meanwhile, the unemployment rate fell half a percentage point to 6.4 percent last month. The rate fell in part because more people (5,457) quit looking for work. But more people (8,111) also reported they'd been paid for work during the month. Both have the effect of pushing down the jobless rate.
The U.S unemployment rate in October was 9 percent.
There was some mildly encouraging news regarding the state's payroll employment in September.
As more employers reported their headcounts for the month, the jobs picture improved. The original net loss of 7,400 jobs was revised to a decline of just 1,900.
As we've noted in an earlier post, the unemployment rate in Minnesota dropped last month to 6.4 percent (down from 6.9 percent in September). Meanwhile, payroll employment fell by 6,100 jobs.
How can there be fewer jobs AND lower unemployment? If you're like me, those contradictory pieces information may scramble your brain.
Here's what's up. There's a lot of reasons why the numbers can seem contradictory, but in this case there's funky stuff going in the way the BLS (U.S. Bureau of Labor Statistics) "smoothes" the numbers. That's true both of the unemployment rate and of the payroll employment number, which, you may recall, come from two totally different surveys.
The unemployment rate got pulled down in part because the effects of the state government shutdown in July were still swirling around in the numbers. Some of those workers' return to work didn't show up until the October report, partly because of how the BLS "smoothing" process captures changes in the job market. Weird, right?
On the payroll employment side of things, there's another "smoothing" process that goes on. And state labor market analyst Steve Hine is quick to point out that those numbers, which he's no longer in charge of crunching, frequently have to be revised by BLS. Case in point: the 7,400 job losses initially reported in September got revised down to 1,900.
Sounds like Hine's not a fan of the smoothing techniques.
It may be frustrating that these numbers can seem so imprecise and fraught with problems. But that's why it's important to look at long-term trends, not just a month's worth of numbers.
So it's worth noting that the unemployment rate and payroll employment have both been improving, albeit sluggishly.
Posted at 3:59 PM on November 17, 2011
by Annie Baxter
A major name in the Minnesota homebuilding industry is winding down its business and planning to liquidate.
Rottlund Homes is liquidating its assets because of sluggish demand for new homes and difficulty procuring loans from banks, according to chief financial officer Steve Kahn:
"The bank syndicate we currently have no longer wanted to support the housing market," Kahn said, "and really there are no banks that want to invest in private homebuilders. So they felt it best if they just sold off the remaining assets that the company has."
The company largely builds townhomes. Kahn says at its height in 2005 or so, Rottlund used to do $350 million in sales, but that's dropped off to about $50 million.
The company's peak employment exceeded 200 workers spread across offices in Minnesota, Florida, and Iowa. Now only 18 workers remain.
Kahn says Rottlund is completing all the remaining homes under construction:
"It's not like we're going out of business tomorrow. All the subcontractors that are completing those homes will get paid. We hope to sell those remaining homes. There are about 30 homes that we have left to sell in the Minnesota market," Kahn said.
Rottlund must also sell off its finished lots and raw land. If it's not possible to do so, Kahn says the bank would likely foreclose on those assets.
According to the company's web site, Rottlund Homes is one of the industry's largest privately-held homebuilders and land developers operating in the Twin Cities. Rottlund started building homes in 1973.