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Minnesota workforce shrinks by 1,500 in August

Minnesota’s workforce shrank by 1,500 jobs in August, marking the fourth month in 2016 that has seen negative job growth. The loss helped push the state’s unemployment rate to 4 percent, up from 3.9 in July.

Despite the monthly losses, the state has added 40,629 jobs since August 2015, according to data released Thursday by the Minnesota Department of Employment and Economic Development. Minnesota has also stayed ahead of the national unemployment rate, which held steady from July at 4.9 percent.

Steve Hine, director of DEED’s Labor Market Information Office, said job gains are slower in Minnesota than the nation as a whole. The workforce has grown by 1.4 percent since last year, slightly behind the 1.7 percent national rate.

That lag, he said, is due in part to the state’s economy coming through the Great Recession with fewer job losses than other states and to slow recoveries in manufacturing, information services, mining and logging, and a sector called “other services.”

Construction lost more jobs in August than any of the other 10 industry sectors DEED tracks, dropping 1,900 workers from payrolls. Still, construction remains on an upswing year over year, having added 5,087 jobs since August 2015.

Other August job losses came with other services losing 1,100 jobs, manufacturing with 1,000 jobs cut, a 700-job loss in financial activities, another 700 in the leisure and hospitality sector, and 200 jobs cut from professional and business services.

Only four of 11 market segments DEED tracks saw job gains in August over the previous month. The top gainer was trade, transportation and utilities, which added 2,300 new jobs. Education and health services had the next-highest tally at 700. Government jobs were up 600, while the information industry picked up 500 jobs.

Along with fewer jobs, more workers left the workforce entirely. During a Thursday conference call, Hine said workforce participation fell in August to 69.4 percent as more than 9,000 people left the state’s employment rolls. At the same time, the number of job vacancies in the state was near a historic high during the month at 97,600, according to DEED. At that number, there are 1.3 unemployed people in the state for every vacancy.

Taken together with the job market’s performance the rest of the year, August’s employment numbers do not bode ill for the economy, said DEED Commissioner Shawntera Hardy.

“Job growth over the past year indicates the Minnesota economy is expanding at a healthy pace,” she said.

Hine agreed that Minnesota’s jobs economy is still on a positive track and said it is one that favors job seekers. The shrinking workforce is likely due to retirements among baby boomers, he said. Younger workers are in greater demand, he said, and should be able to command higher wages.

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