Another mixed bag in Minn. job stats: losses but flat jobless rate

Minnesota's job statistics in September echoed the overall theme the state has seen in the past several months: a mixed bag, with no obvious signs that we're in the midst of an economic recovery.

The state lost 9,900 jobs in September after gaining a similar total in the two previous months. The unemployment rate stayed flat at 7 percent, likely because the percentage of Minnesotans participating in the labor market hasn't increased.

The good news is that Minnesotans on average are working more hours -- almost an hour longer than a year ago, which would translate to some 60,000 more full-time workers.

In addition, the construction industry gained more jobs than it has since April 2005, and manufacturing jobs were up for the fourth month in a row. Both industries have suffered huge job losses during the recession.

Steve Hine, labor analyst for the state Department of Employment and Economic Development, attributed the large loss of jobs to the tricky calculations involved in adjusting the September numbers to take away the effect of so many people returning to school.

"It was certainly a disappointment and a surprise that we saw such a significant loss in jobs. Some of the things that temper my disappointment, though, would include that observation that these seasonally adjusted numbers can be very fickle at this time of year," Hine said.

The worst job losses occurred in professional and business services, which were down 4,000. Government lost 3,800 jobs, leisure and hospitality lost 3,500, education and health care jobs were down by 2,900 and jobs in other services were down by 2,500.

Construction added 3,100 jobs, transportation and utilities added 1,400, manufacturing was up 1,300 and information was up 900.

Hine said the construction industry in Minnesota is still employing about 46,000 fewer people than it was just a few years ago, but he said that might be OK.

"(September's gain is) not returning us to our pre-recessionary peak, but we might not see a return to that," he said. "We might not want to see a return to that pre-recessionary peak considering it was associated with that housing bubble."

The housing bubble, which caused high home values that then declined quickly when the bubble burst, was followed by a recession in which developers stopped building new homes.

Hine said September's construction job gains could continue for October, considering the mild weather the state has had.

While the local job numbers were disappointing, Hine and DEED Commissioner Dan McElroy emphasized that Minnesota is still better off than many other states.

The national unemployment rate for September was 9.6 percent. Despite a decline over the past several months in Minnesota's work force participation rate, the state still has one of the highest rates in the country. September's rate held steady, Hine said.

"We tend to see participation increasing as the perception of job opportunities improve, and yet we've been seeing this decline," Hine said. "We'll again watch the numbers over the coming months, but it would not be a surprise if we see that participation rate starting to rebound."

Besides a relatively high work force participation rate and low unemployment rate, there is other evidence that Minnesota's economy might be better off than some parts of the country.

The Federal Reserve reported Wednesday that wages and consumer spending are both up in the region that includes Minnesota. Employers in manufacturing and construction also provided information in the Fed's survey showing that activity was on the rise.

Some other parts of the country continued to see flat retail sales and no growth in the industries hit hard by the recession.