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Minnesota loses 10,300 jobs in August

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ST. PAUL - National economists say the recession technically is over, but Minnesota economic leaders say workers have not felt an improvement.

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A report released Thursday showed 10,300 Minnesota jobs disappeared last month, for a total of 120,300 in the past year. The August job loss wiped out a 7,700 job gain reported a month earlier.

At the same time, the Department of Employment and Economic Development reported unemployment fell 0.1 percent to 8 percent in August, the second straight month joblessness dropped. The national jobless rate was 9.7 percent.

A department labor expert, Steve Hine, indicated the jobless rate could be misleading because it does not include those who have stopped looking for work. Hine said that no one knows how many people fit into that category.

Gov. Tim Pawlenty put a positive spin on the figure. He said that combining the July and August numbers means job numbers are remaining about static and they "hopefully show a bottoming out."

Economic Development Commissioner Dan McElroy said that he is not happy with the job-loss numbers, but in any recession employment rebounds after other sectors of the economy.

Comments this week by Federal Reserve Chairman Ben Bernanke that the recession is over may be technically correct, but Americans should not expect to see jobs returning right away.

State Economist Tom Stinson has said it will be years before employment rebounds to pre-recession levels.

"The end of the recession is defined as when economic activity begins to increase," Hine said. "What that says is we are still at the bottom."

But there are good signs.

"We continue to see underlying information that indicates that non-employment aspects of the economy are improving," McElroy added.

The August job reduction was in many areas of the economy. Leisure and hospitality, trades, transportation, utilities, education, health care and government sectors led the job losses.

Hine said many of the education and government job loses may have come because schools and colleges did not hire workers as early as in the past. With Labor Day falling late, most schools started classes later than usual and in many cases may not have added school-year employees until September when in past years they were hired in August.

In the past year, Minnesota lost 120,300 jobs at a rate slightly less than the national average. Manufacturing and professional and businesses services experienced the most loses in that time.

The state lost 4.3 percent of its jobs in the past year, but it was worse in the Duluth-Superior area where 7,100 jobs were lost, for a 5.3 percent rate.

With the state's 10,300 lost jobs in August, there were 2.65 million Minnesotans working.

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Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.
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