The state’s employers added jobs over the past year at a slower rate than the rest of the nation, an unwelcome shift from previous reports.
Updated: May 16, 2013 - 11:16 PM
Minnesota’s job market shrank for the second straight month in April, shedding 11,400 jobs thanks to a delayed spring and continued weakness in manufacturing hiring.
“We had a pretty bad month,” said Steve Hine, labor market economist for the Minnesota Department of Employment and Economic Development, which released the job figures Thursday.
A snowy March and April helped dampen hiring, but weakness in the labor market extends beyond what can be explained by the weather. Government, manufacturing, professional and business services, financial activities and construction all shed jobs on the month.
“The breadth and severity of declines in areas that are not particularly sensitive to weather does suggest that there might be broader forces at work here,” Hine said.
Through February, Minnesota posted its strongest six-month streak of job gains in nearly 30 years. But the state has since cooled off, dropping a combined 14,700 jobs in March and April.
Minnesota economic development officials have touted for a year that the state’s growth was faster than the national average. That’s no longer the case, partly because U.S. hiring was stronger than expected in April, as the nation added 165,000 jobs.
In the past 12 months, Minnesota’s job growth has been 1 percent, compared with a U.S. rate of 1.6 percent. The state has added a total of 22,700 jobs since April 2012. Manufacturing, construction and financial services hiring have all taken a step backward in that time.
The biggest losses in April were in trade, transportation and utilities, which shed 5,700 jobs. Most of the weakness was in trucking and warehousing, industries sensitive to swings in manufacturing. Manufacturing employment has been basically flat since April 2012, shedding 300 jobs.
“Jobs in the trucking industry are primarily because of manufacturing,” said Rich Hawkins, transportation coordinator at Dakota County Technical College. “If manufacturing is down, then there’s not enough product moving to necessitate an increase in the workforce.”
Part of what makes the April jobs report look bad is comparing it against the strength of the job market last April, when employers added 14,100 jobs.
“Last year we had a very early and strong spring,” Hine said. “This year we’re having a very late and weak spring.”
Hiring in recreational businesses like marinas and golf courses, as well as local government jobs in municipal parks and golf courses have been slower than a year ago, which Hine also attributes to the “lousy weather.” The lack of new jobs in construction is mostly due to weak hiring in heavy construction.
“That over-the-year decline in construction is just a weather-related temporary gap,” he said.
Meanwhile, Minnesota’s unemployment rate inched downward to 5.3 percent, its lowest level since May 2008 and well below the U.S. rate of 7.5 percent in April.
Hine predicted a month ago that the April numbers would be affected by the weather, and he expects May’s figures to improve as construction and other weather-related hiring ramps up. Leading indicators like temporary hiring and online job postings picked up in April, offering further hope that hiring will improve in coming months.
“While we’ve seen mixed results in the labor market in recent months, the overall outlook for jobs in Minnesota remains positive,” said Katie Clark Sieben, commissioner of the department.
Adam Belz • 612-673-4405 Twitter: @adambelz
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