The strength of the job market nationally and in Minnesota continues to surprise economists, but it's showing signs of slowing.
U.S. employers added 339,000 jobs in May, many more than expected. But job losses picked up as did the unemployment rate, the U.S. Bureau of Labor Statistics reported Friday.
The jobs picture, along with a drop in consumer confidence, has economists wondering whether the Federal Reserve will hold interest rates steady as officials had signaled this week or consider another increase.
And it has Minnesota officials trying to make sense of the contradictory reports.
"We have been in this holding place where we have gotten these mixed signals," said Sean O'Neil, director of economic development and research at the Minnesota Chamber of Commerce.
"Several times this past year, there have been these layoffs at major companies, and it seems there are clouds over the horizon," he said. "But then the job growth continues, and things remain stable despite some of these more high-profile layoffs."
3M, Medtronic, Best Buy, C.H. Robinson, Facebook and Amazon are just a few of the companies that have announced layoffs or site closings in recent weeks.
But companies are still scrambling to fill jobs in Minnesota, where there were more openings than job seekers in April.
For example, Andersen Corp., the Bayport-based window and door maker, needs to hire an additional 450 workers after three factory expansions added 1,000 positions in the past few years, spokeswoman Aliki Vrohidis said.
Other companies, including Minneapolis-based industrial pump and sprayer maker Graco, Arden Hills-based packaging-robot maker Delkor Systems and the Plymouth-based candy firm Maud Borup, say they need more workers, too.
Marvin, the Warroad-based window and door maker, needs engineers so badly it is offering to cover new employees' housing, meals and weekly flight costs. Job openings in nursing homes are so great that the industry is working with the state to find much-needed aides to help the elderly in homes or nursing facilities.
Kevin McKinnon, interim commissioner of the state Department of Employment and Economic Development, said hiring picked up in Minnesota in April and at least the first part of May.
"What we are seeing in our unemployment insurance program as well as our Rapid Response Team, which [responds] to a lot of the layoffs ... is very similar to the volumes and the numbers that we saw in 2018 and 2019," McKinnon said.
"The trendlines we are seeing are not outside of the norms. ... We are on par with pre-pandemic numbers."
Two weeks ago, Minnesota officials reported the state gained a net 4,500 jobs in April with trade, transportation, leisure/hospitality and education showing the biggest gains. State figures for May will be available in a few weeks.
Minnesota's unemployment rate remains lower than the historically low 3.4% U.S. jobless rate.
The U.S. jobs report Friday showed the unemployment rate rose to 3.7% in May from 3.4% in April. Job losses grew by 318,000 to 3 million in May, offsetting the decrease reported during the prior month.
Drew Matus, chief economist at MetLife Investment Management, cautioned that May's higher unemployment rate could signal weakness ahead if companies become more cautious about hiring.
Joblessness rose last month for teenagers, the disabled and people with less education, Matus said. Companies cutting workers with fewer skills and less experience often precedes recessions.
"Before it was a rising tide lifts all boats, and now it seems like the boats have gotten smaller and firms are deciding who gets to sit in them," Matus said.
In a Challenger, Gray & Christmas report on layoffs this week, technology companies led the pack, followed by retail, auto and financial firms. The tech sector reported 22,887 job losses in May for a total of 136,831 so far this year. Last year, the sector cut 4,503 positions, the report said.
"Consumer confidence is down to a six-month low, and job openings are flattening. [Some] companies appear to be putting the brakes on hiring in anticipation of a slowdown," said Andrew Challenger, a Challenger Gray senior vice president.
But companies such as Delkor still need more workers to fulfill contracts. CEO Dale Andersen said the company continues to scour technical school programs across the state, especially in robotics, for new employees. In the past month, the company has added 15 workers.
The Associated Press contributed to this report.
