Minnesota unemployment rate dips to 4.3 percent

Minnesota's unemployment rate fell to 4.3 percent in August, the lowest level in nearly eight years, officials with the Minnesota Department of Employment and Economic Development said Thursday.

But although employers in the state added 6,100 jobs last month, the signs of strength in the job market mask a lot of economic pain that remains.

Workers put in more hours, which helped fatten their paychecks, and employers not only boosted hiring, they signaled through online job ads that they plan to continue doing so.

"At 4.3 percent unemployment I'd say we're getting very close to that point where our labor markets are moving from slack to tight conditions," said Steve Hine, Minnesota's chief labor market analyst.

Despite the strong growth of recent months, Hine acknowledges many people are still forced to take jobs below their skill levels out of economic desperation.

Last month, about 120,000 Minnesotans said they had part-time jobs but wanted full-time work, roughly as big a group as the state's unemployed population.

Hine also said not every full-time job pays enough to cover the bills.

"We've got to be cognizant that there remain real challenges out there both in terms of finding jobs quickly and finding jobs that are real quality," he said.

Janice Aanenson, of Brooklyn Park, is familiar with those challenges.

Aanenson, who has a PhD in education, said she once earned $100,000 a year in a school management job she held for a decade. She was laid off in 2011 and now makes $12 an hour as a supervisor in retail. That income has helped her keep her house. But she has to do contract work and mow neighbors lawns to survive.

Aamensen, who is still looking for a job that pays more than $24,000 a year, said all she does is work.

"You can't get sick," she said. "You can't take a day off to enjoy an anniversary or to celebrate your mom's 75th birthday or to spend more time at your dad's funeral. And those are all decisions I've had to make in the last year."

Tight household budgets are taking a toll on more than consumers. General Mills just reported a 5 percent drop in U.S. sales yesterday, and a 25 percent drop in profit for the latest quarter. One of the main reasons: consumers remain tight-fisted. In response, the company boosted cost-cutting by another $100 million a year. Today the company announced two plant closings on the coasts nearly 600 jobs.

Toby Madden, an economist with the Federal Reserve Bank of Minneapolis, said there are signs that wages are rising. He notes wages ticked up nationally between July and August.

"And when we survey business leaders they tell us it's harder to get workers," Madden said. "We're also finding that they're planning to increase wages by 2.6 percent which is higher than the inflation rate."