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A Pause in the Hot Streak

10/18/2018 11:00:00 AM

Minnesota’s seasonally adjusted unemployment rate fell to 2.9 percent in August, a number not seen since December 1999. The state’s record-low unemployment rate was a seasonally adjusted 2.5 percent in both January and February 1999. (The US unemployment rate in August was 3.9 percent.)

Minnesota employers eliminated 200 jobs after three consecutive months of growth. Over the past year, the state has added 50,904 jobs, a 1.7 percent growth rate. US jobs are up 1.8 percent in the past year.

Details:

  • Monthly employment changes across the major sectors of Minnesota’s economy were fairly small, with job losers outnumbering gainers seven to three and logging and mining holding steady. Gains occurred in construction (+1,700); government (+1,000); and leisure and hospitality (+400). Sectors that lost jobs included education & health care (-1,000); manufacturing (-900); and trade-transportation & utilities (-600). Information, financial activities, professional & business services, and other services each lost 200 jobs.
  • Annual job growth overall again slipped below the corresponding national rate by a tenth point, but six of the eleven major sectors matched or exceeded their national counterparts. Construction led the sectors in annual growth rate at 5.1 percent, followed by leisure & hospitality at 4.1 percent, which added the most jobs at 11,802.
  • Minnesota Manufacturing Week is recognized Oct. 1-7, and throughout October manufacturers are opening their doors to students and the public for tours. Here’s a more detailed look at their August numbers, provided by the Labor Market Information Office. Regular readers have witnessed the longest continuous (seven consecutive months) streak of over-the-month gains since 2014; however, preliminary reports indicate over-the-month growth in manufacturing has slowed down. Manufacturing lost 900 jobs in August for a 0.3 percent loss rate. (US growth rate for this sector stagnated at 0 percent growth rate.) Given that manufacturing in Minnesota had impressive growth rates from January through July, the small loss is not a cause for immediate concern. The July preliminary over-the-month employment growth of 1,500 (+0.5 percent) was revised downward to a gain of 1,300 jobs (+0.4 percent). With revised July and preliminary August job numbers in, 2018 still bodes well. Job losses were registered by Durable Goods Manufacturing (shed 400 over-the-month jobs for a 0.2 percent job loss rate), and Non-Durable Manufacturing (shed 500 jobs for a 0.4 percent loss rate). Manufacturing posted unadjusted over-the-year growth of 7,439 jobs for a 2.3 percent growth rate, slightly higher than the US over-the-year 2.1 percent growth rate. Both the over-the-month and over-the-year growth have been consistently encouraging for manufacturing, meaning that the August job loss can be attributed to a labor market correction.
  • The private sector average work week held steady in August at 34.3 hours, up 0.1 hours since August 2017; and the private sector average wage rate fell by 28 cents to $28.80. Over the past 12 months, the average wage rate has risen 60 cents or 2.1 percent. Note that these estimates are somewhat unreliable due to small samples.

When breaking out unemployment rates by race, using unofficial data from the Current Population Survey, black unemployment decreased to 4.8 percent in August from 5.3 percent in July, for a 4.1 percentage point decrease over-the-year. While this remains among the lowest rates on record dating back to December 2001, the black unemployment rate continues to be higher than the white unemployment rate at 2.5 percent – leaving room for improvement. The Hispanic unemployment rate decreased by 0.4 percentage points from 5.7 percent.

Here are the numbers.

Metropolitan Statistical Areas

Four regions gained jobs over the past 12 months:

  • Minneapolis-St. Paul MSA (up 2.0 percent)
  • Duluth-Superior MSA (up 1.7 percent)
  • Rochester MSA (down 0.4 percent)
  • St. Cloud MSA (up 1.8 percent)
  • Mankato MSA (up 4.3 percent)

Statistical Snapshot

Here is the economic snapshot for August. Highlights:

  • 1-year growth in employment was 1.7 percent, ranking 27th nationwide. (US, 1.8 percent)
  • Minnesota’s job creation since January 2011 was 316,800 or an 11.9 percent increase. (National growth rate, 14.1 percent)
  • Minnesota’s labor force participation rate was 70.3 percent, ranking second highest nationwide. (US, 62.7 percent)
  • Minnesota’s percent of long-term unemployment (>27 weeks) was 14.1 percent (US, 21.5 percent)
  • The unemployment rate was 2.9 percent, seasonally adjusted, the eighth lowest (US rate, 3.9 percent)
  • Minnesota’s percentage of people below the poverty line was 9.5 percent in 2017, the third lowest nationwide. (US rate, 13.4 percent)
  • Minnesota’s percentage of people with no health insurance was 4.4 percent in 2017, the fourth lowest nationwide (US rate, 8.7 percent)
  • Minnesota’s percent of population with an Internet subscription was 86.4 percent in 2017, the 11th highest nationwide. (US rate, 83.8 percent)

State Job Vacancies at Record 142,000 in Second QTR

DEED’s biannual Job Vacancy Survey found that Minnesota employers reported a record 142,282 job vacancies in the second quarter, up 15.7 percent from the same period one year earlier. The state had 0.6 unemployed people for every job vacancy. The job vacancy rate was 5.2 percent, or 5.2 openings for every 100 jobs in the state. The number of unemployed people per vacancy was a record low, while the job vacancy rate was a record high.

“These figures reflect a very strong economy and high demand for labor statewide. At the same time, they underscore the need for DEED and its partners to continue investing in training programs, specifically for Minnesotans on the economic sidelines, to meet the talent needs of employers and to ensure that the economy continues to grow,” said Commissioner Shawntera Hardy. For more.

Seven Global Locations Promote Trade, Foreign Direct Investment

The Minnesota Trade Office now has seven international representative locations that provide export promotion and assistance to Minnesota companies selling goods and services globally and work to attract foreign investment from companies looking to do business in Minnesota. The seven offices are located in Canada, Mexico, Japan, European Union, United Kingdom, Australia and Southeast Asia. For more.

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