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Minnesota losing jobs at rapid rate
By Bill Catlin
Minnesota Public Radio
November 13, 2001
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Minnesota's unemployment rate jumped to 3.7 percent in October - an increase of .4 percent from September. Minnesota's jobless rate remains well below the national rate of 5.4 percent. But the state is losing jobs at a faster rate than the U.S. as a whole.

Jay Mousa, with the Minnesota Department of Economic Security, says the relatively large .4-percent increase in the jobless rate was consistent with a big jump in unemployment insurance claims and other indications the job market is weaker.

"The increase in the unemployment rate was expected. And October reflected the impact of the Sept. 11 attacks," according to Mousa.

The October unemployment results provide the first clear view of the impact the terror attacks have had on Minnesota's jobless rate. And while the unemployment rate is low historically, non-farm payroll numbers tell a darker story.

Mousa says Minnesota's monthly job count has consistently shown gains when compared to the year before. No longer. "From October to October, we are down 17,500 jobs. And that puts us in negative territory for the first time since June 1983," Mousa says.

Minnesota's job count peaked last May at nearly 2.7 million. Each month since then it has declined.

"The problem is that we are losing jobs at a faster rate than the rest of the nation," says state economist Tom Stinson, who says Minnesota has lost more than 24,000 jobs in the last two months, but he says that number would be only about 14,000 if payrolls were declining at the national rate.

Stinson says Minnesota's diversified economy can help the state fare better during a downturn than other states with heavier concentrations of hard hit industries. "But, a diverse economy doesn't protect you from a national economic downturn. And when part of that national economic downturn affects a headquarters company in Minnesota, a major airline company, we can expect to have a disproportionate share of the cuts," Stinson says.

After the September terror attacks, Northwest Airlines announced it would cut some 4,500 jobs. Layoffs have hit related industries as well. But the transportation sector is not suffering alone. The manufacturing sector has lost a lot of jobs over the last year. Stinson says those jobs tend to pay higher wages and bring dollars into the state.

"Since May, we've lost 35,000 jobs, which is about one year's normal growth and 30 percent of those jobs have been manufacturing jobs," according to Stinson.

Marketing professional Bill Jordan has been looking for a job for two months. Part-time consulting work is helping to pay the bills. Jordan says the weakening economy and job market are scary, but he remains optimistic about finding another job. "I think opportunities still do exist. They're harder to find. Companies aren't having to advertise or advertise as much to get the same quality of individual in the door that they did a year ago. So the onus is on the individual to go out and find the opportunities," Jordan says.

Jordan acknowledges he feels some pessimism about the near term, saying the job market is likely to get worse before it gets better.

Jay Mousa of the Minnesota Department of Economic Security shares that analysis. He expects the state unemployment to grow to around 4 percent in the coming months.

More from MPR
  • Jobs and Prayers As layoffs rise and the job market weakens, church-based support groups for job hunters are growing in number and size in the Twin Cities. The groups typically offer job seekers emotional support and the opportunity to expand their network of contacts.
  • Economy on the Edge The long boom of the 1990s, when incomes and stock portfolios moved ever upward, and the New Economy promised rising productivity and wealth, seems a distant memory. By summer's end, the state and national economies were already limping to a near standstill, with almost daily reports of layoffs, corporate losses, and slumping financial markets. The fear now is the shock to consumer and business confidence from the terror attacks may tip the economy into full recession. What does the future hold for the state's economy?