According to the Minneapolis Star Tribune, the state’s unemployment rate rose above the national jobless rate for May. The state’s jobless rate figures are from the Minnesota Department of Employment and Economic Development (DEED) monthly report. What makes this significant is that never before, since the state began keeping records in 1976, has Minnesota’s jobless rate topped that of the national average.
Job losses were highest in the construction industry, according to both the Tribune and the Associated Press. About 1,700 jobs were lost in construction alone. On the other hand, the AP reports that Minnesota added more than 41,000 jobs, and the number of jobs available in Minnesota increased faster than the national average.
According to the AP, Minnesota education and health services added 5,200 jobs on a seasonally adjusted basis. The state government added 3,200 jobs, and the trade, transportation and utilities sector added another 800 jobs.
Toby Madden is the regional economist for the Federal Reserve in Minneapolis. According to the AP, he explained the discrepancy by suggesting that self-employed workers show up in the numbers as unemployed, while the number of jobs is reported by employers. Madden also said that there has been a “huge drop in housing starts” in Minnesota in 2006, “and we’re continuing to see some deterioration in housing starts this year. The construction industry is obviously hurting the employment picture.”
Otherwise, reports the AP, Madden points to Minnesota’s diverse economy as being responsible for holding steady overall when things turn downward nationally. By contrast, Madden said, states such as Montana have experienced more extremes, or booms, followed by busts. For example, Madden said, until recently Montana’s jobless rate was running well above the national average. Currently, however, Montana’s unemployment rate is around two percent as a result of the boom in the mining, oil and gas industries.
As a result, Madden said, “it might not be that Minnesota is doing that bad, it might just be that the United States are doing that much better, because certain sectors are growing” faster elsewhere than in Minnesota, reported the AP.
According to DEED’s June 12 news release, Commissioner Dan McElroy said “Minnesota is outpacing the nation with over-the-year employment growth above the nation’s job growth of 1.4 percent.” The news release reported that, although Minnesota’s jobless rate now exceeds that of the national average, the difference is just one-tenth of a percent, 4.6 percent, compared to the nation’s 4.5 percent. Further, Minnesota has posted job gains in 20 of the last 25 months.
Minneapolis Star Tribune, Minnesota’s jobless rate rises, http://www.startribune.com/535/story/1241106.html
Sioux Falls Argus Leader, Minnesota unemployment rate tops national jobless rate, http://hosted.ap.org/dynamic/stories/M/MN_UNEMPLOYMENT_RATE_MNOL-?SITE=SDSIO&SECTION=HOME&TEMPLATE=DEFAULT
DEED News Release, http://www.deed.state.mn.us/news/release/2007/lm12Jun07wf.htm