State loses 16,700 jobs in June

Job losses in Minnesota ramped up again in June. Employers shed 16,700 jobs, about five times more than state job losses in May.

A number of industries took big hits, including construction, which had raised hopes the previous month with job gains.

Officials with the Minnesota Department of Employment and Economic Development had cautioned against reading the relatively small job losses back in May as a sign of recovery. But the June numbers were much worse than May, and that prompted some officials to admit the hopes they'd kept private had actually been dashed.

"In May I was cautiously optimistic, hoping that a turn for the better in the road for the recovery was close," said DEED commissioner Dan McElroy. "It wasn't as close as I had hoped."

State economist Tom Stinson was more cautious than optimistic about the May tally. He thought the labor market was in worse shape than the numbers suggested back then. But now, he thinks the latest numbers are too gloomy.

But Stinson said even if the month-to-month picture is a little fuzzy, the overall one is all too clear.

"If you look at what's happened over the last year, Minnesota's lost more than 100,000 jobs. That's about 3 years worth of normal job growth," Stinson said.

The MPR job pain index hit its highest point ever in June. Labor demand, expressed through want ads, stagnated. And employers kept cutting jobs.

Click here to view MPR's Job Pain Index.

However, some sectors did add jobs in June. Trade, transportation, and utilities gained 800 jobs. Health care and social assistance showed a small improvement over May. Financial activities added 600 jobs. That sector tends to represent well-paid financial jobs, though DEED labor market analyst Steve Hine notes it also includes pawn shops, which, in a sign of the times, have seen business pick up.

"I wouldn't point at that very small gain as being any sort of sign that the financial markets are turning around, but it is a continuation of what has been a relatively strong performance compared to the nation," Hine said.

Construction stood out among the industries with steep losses in June. It dropped 3,300 jobs in June, after adding jobs the month before. Officials say the seasonal adjustments could again be overstating the employment declines.

DEED commissioner McElroy said the federal stimulus package is funneling money for projects into the construction sector-- largely for infrastructure improvements.

"We have an unprecedented amount of money that's under contract, but it takes a few months after contracts are let before people go to work," McElroy said.

But Dave Semerad, the chief executive of the Associated General Contractors of Minnesota, doubts the stimulus will live up to the hype.

"I think this is unfortunate because it gives people hope without the reality that it's going to happen," Semerad said.

Semerad said the stimulus package likely has saved some jobs. He's hopeful that highway construction projects will help the nation's infrastructure at the same time they put contractors back to work. But he's skeptical that stimulus projects will do enough to boost construction employment.

"We think it's going to be years before the construction industry returns to levels we saw a few years ago," Semerad said.

Laid off architect George Hutchinson, in Minneapolis, is also expecting a long recovery. He lost his job at a major Minnesota firm in January and has recently picked up some part-time design work. He hopes it will continue, but he said other opportunities will likely stay lean for a while.

"I think overall the whole commercial real estate market is overbuilt and we haven't seen the full fall out from that yet," Hutchinson said. "So I think there's still a ways to go maybe a year or so, before the whole commercial market's back into equilibrium before developers start to look at projects again, which right now they're not."

Meantime, Hutchinson is spending time volunteering, and taking classes in "green" design and construction, hoping that will pave the way to new work.