Minn. jobless rate drops to 6.9% but employers cut 7,400 jobs

Minnesota's jobless rate dropped three tenths of a percent from August to September, even as employers cut a net 7,400 jobs.

Private sector employers reported a net decline of 14,400 jobs. While that represents a major turn-around from the job gains of the previous four months, which averaged 10,900 a month, state labor market analyst Steve Hine says he's not alarmed.

"It's not unusual to see a step-back after positive developments," Hine said. He noted that several sectors had big job growth spurts over the summer, so it's not surprising to see somewhat of a correction in their numbers in September.

Hine also cautioned that September is a difficult month for seasonal adjustments, which can skew the data.

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Government added 7,000 jobs in September, largely in connection with education hiring at the start of the school year. But public sector employment has declined by 3,800 positions over the past year.

Meanwhile, Minnesota's unemployment rate dropped to 6.9 percent from 7.2 percent in August. The jobless rate is calculated from a survey of households which found an additional 12,404 people had been paid for work over the past month.

Hine says that he pegs the unemployment rate even lower, using a "non-smoothed" formula to calculate it. By Hine's reckoning, then, the unemployment rate in September actually plunged to 6.2 percent.

Other unemployment data signaled similarly positive news last month. Initial claims for unemployment hung below the "magical threshold" of 25,000 for a second month in a row. Hine says that points to growth. In addition, the new unemployment insurance claims were the lowest of any September reaching back to 2007, before the official start of the recession.

Minnesota Commissioner of Employment and Economic Development Employment Mark Phillips said the longer-term trends have been positive, with Minnesota employers adding 27,700 jobs over the past year, representing a growth rate of 1 percent.

"Minnesota is slowly pulling out of the recession, gaining 53,600 jobs over the past two years," said Phillips.

However, Steve Hine said that if the job losses continue in October and November, DEED will have to reassess its take on the labor market's performance.