Minnesota jobless rate at 3 1/2-year low

Mike Meyers, Star Tribune National Economics Correspondent

Published May 18, 2005 JOBS0518 in the Star Tribune

Minnesota's unemployment rate fell to 4 percent in April, the lowest it's been since September 2001, as the state gained 5,000 jobs.

Only twice in the past two years have more jobs been created in the state in a single month.

A top jobs tracker called the news "definitely positive," but she said Minnesota needs to string together a number of good months to escape the drag of what was a dismal first quarter on the hiring front.

For the first four months of 2005, the state has created jobs at less than half the national pace. Minnesota remains 4,900 jobs short of its peak employment level in March 2001, trailing the nation and 25 other states that already have exceeded their pre-recession peaks.

The fall in Minnesota's jobless rate from 4.4 percent in March puts the state well ahead of the national figure -- 5.2 percent -- but April's movement was the first real progress in months.

"Had we grown at the national rate in the first four months of this year, Minnesota would have created 16,000 jobs. Instead, Minnesota generated 6,200," said Oriane Casale, assistant director of labor market information at the Minnesota Department of Employment and Economic Development. Minnesota businesses "really have a lot of catching up to do."

Gov. Tim Pawlenty, in a statement, was more upbeat, saying the April job news shows that the state's economic development and job-creation strategies are paying off.

"We're clearly moving in the right direction," the governor said. "This news should remind us that we must continue to stay focused on making Minnesota a more competitive place to do business and create good jobs."

Steve Hine, labor market information director, said the best aspect of the April number is that it raises the hope of a stronger quarter, although state officials are unable to make any projections on that front.

"The first quarter was a weak one," said Hines, referring to the three-month winter stretch, when only about 1,000 jobs were created. "April's employment gain was a much stronger start to the second quarter. That raises hope that last quarter was a temporary pause, probably brought on by high oil prices and shaken consumer confidence."

Job prospects for the unemployed have improved, but only marginally, in recent months, said Jane Samargia, executive director of HIRED, a Minneapolis-based nonprofit agency that looks for jobs for 8,000 to 9,000 unemployed people every year.

"We see a little change but not a lot," she said. "It's still really tough out there for a lot of workers at a lot of levels."

Both seasoned workers and newcomers to the job market still can spend months looking for a position, Samargia said.

"It's a very competitive job market, both at the beginning level and experienced level," she said. "For youth and unskilled adults, it's still very tough."

Part of the explanation for a lower unemployment in the face of modest job growth is that fewer people are looking for work, Hine said. The number of people in the state's workforce -- people either working or actively looking for work -- is down 30,000 from pre-recession levels.

(Unemployment figures count only those workers who are actively searching for a position, not those who have given up temporarily.)

Some 148,000 Minnesotans were out of work and actively looking when the state's jobless rate hit a high of 5 percent in January 2004. Last month, about 118,000 people fit that category.

The unemployment rate would be higher if an additional 30,000 people who have stopped looking for work were to resume seeking jobs, so the jobless rate could stay steady or even rise in coming months if increased hiring means more people start looking again for work.

For April, job gains were strongest in professional and business services (up 2,700 jobs), leisure and hospitality (up 2,600) and construction (up 1,600). Manufacturing was the biggest loser, shedding 1,900 jobs, and the education and health services industries dropped 900 jobs.

Government added 1,000 jobs, while information services lost 400 jobs in Minnesota. Trade, transportation and utilities employment remained flat.

The Ford Motor Co. plant in St. Paul announced temporary layoffs last month, contributing to themanufacturing jobs decline.

Mike Meyers is at meyers@startribune.com.




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