State's job growth catching up with the rest of the countryby Laura McCallum, Minnesota Public Radio
State officials say Minnesota's economy added nearly 12,000 jobs last month. Over the past year, the state has added jobs at more than double the national rate. At the same time, Minnesota's unemployment rate inched up last month, because more people are now looking for work.
St. Paul, Minn. — Gov. Pawlenty says Minnesota's job market is "on fire" at the moment. He says Minnesota has added jobs for the last 13 months, and the state accounted for 10 percent of the nation's job growth in July.
"These are extraordinary numbers, and really historic in terms of what it means for the performance of Minnesota's economy and jobs, and behind that is a great quality of life story," said Pawlenty.
Pawlenty, who's seeking a second term, held a news conference to tout the numbers, as he did two months ago when the state's jobless rate hit a five-year low.
At that time, the jobless rate declined in large part because many people gave up trying to find a job. Now, the reverse has happened. More people are looking for work again, pushing up the state's unemployment rate.
Ward Einess, acting commissioner of the Department of Employment and Economic Development says the jobless rate for July was 3.8 percent, up two-tenths of 1 percent from June.
"We think that's a sign that there's optimism out there in the labor pool," said Einess. "People see people being hired, they see the postings, they feel an energy in the economy and they're re-entering the labor force."
More than half the jobs added in Minnesota last month were in the government sector. State labor market analyst Oriane Casale says about half the government jobs added were in education, both higher ed and K-12.
Casale says many schools and colleges didn't lay off as many people as they usually do in the summer. That helped boost the latest job numbers.
"And so what we anticipate is that in the fall, we're also not going to see the increase in hiring that we normally see," said Casale. "And so this is impacting the numbers in that it looks like this is a good summer, when what it could actually mean is that the fall will be a less than good fall."
Casale says other areas of strong job growth last month included professional and business services, including IT and temp jobs, and the hospitality industry, particularly restaurants. The state lost jobs in the construction and factory sectors.
Casale says residential construction is slowing, and some factories are doing their annual shutdown to replace or maintain equipment. She also notes that Minnesota's job growth lagged behind the national average until recently.
"The national job growth started picking up a lot sooner than the state job growth. Now we're picking up, and the nation is slowing down," said Casale. "So what you're seeing is we're beginning to surpass the nation in terms of job growth where, just six months ago, we were quite a bit below them."
Both Casale and Gov. Pawlenty caution that with high fuel prices, rising interest rates and a sluggish housing market, the economy could slow down in the next six months.