Looking for work? The news isn't good

Minnesota employers shed more than 10,000 jobs in August. The unemployment rate fell slightly. But that seems to be due at least in part to discouraged job hunters giving up their search for work.

In July, state officials had thought Minnesota added some 10,000 jobs. Now, they figure it was more like 7,700. And last month, Minnesota employers shed an estimated 10,300 jobs.

That's not where Dan McElroy, the commissioner of the Department of Employment and Economic Development, thought Minnesota might be headed.

"I said last month that I wouldn't be happy until we strung together a number of months of positive numbers," he said. "That didn't happen. I'm not happy and I'm a little bit discouraged."

In the past year, Minnesota has lost about 120,000 jobs.

Minnesota's unemployment rate slightly, to 8 percent in August, compared to 8.1 percent in July.

But that rate is tricky. It can look better, for instance, if unemployed workers completely give up hope of finding a job and stop looking for work, or if they retire or take other steps that exclude them from the count of people working or looking for work.

"It's very frustrating ... I don't see an end in sight."

That helps explain the unemployment rate drop for Minnesota. In August, there were about 6,000 fewer Minnesotans who were employed or seeking a job.

There's a lot of talk lately that the recession has ended and the economy is beginning to recover. But the job market often lags far behind the rest of the economy when it does start to rebound.

So far, McElroy says there are none of the early signs that precede an employment turnaround.

"Prior to robust hiring, we expect average hours worked to go up. We haven't seen that happen yet," said McElroy. "We won't be surprised to see some increase in employment for temporary help agencies. That isn't showing up yet."

In August, the greatest job losses in the state occurred in the leisure and hospitality sector, which lost 3,200 jobs. Manufacturing continued to lose jobs, too -- 900 in August. Over the past year, the manufacturing sector has lost about 40,000 jobs.

But there are signs manufacturers are seeing increased sales and orders, according to Bob Kill, CEO of Enterprise Minnesota, which provides consulting services to small and mid-size manufacturers.

"The mood in small and medium-size manufacturers is mixed. But there's a good share of them that are guarded optimists now in their own business, and what they see in their sector," he said.

Kill expects that will eventually result in an increase in hiring by manufacturers.

"You'd have to say the job growth will follow this improved output that we're clearly seeing," said Kill.

The greatest job growth in August came in the professional and business services sector, which added 1,300 jobs. That category is very broad -- it includes everyone from CEOs and lawyers to garbage and bill collectors.

For job hunters like Ellen Zebrun of Minneapolis, the grim job picture is no surprise.

"It's discouraging. It's very frustrating," Zebrun said. "The most disheartening piece for me is I don't see an end in sight."

Zebrun has been out of work since December.

State economist Tom Stinson says he's encouraged that Minnesota's unemployment rate is well below the national rate of 9.7 percent. But he says the economy and job market won't be roaring back.

"The economy is struggling along the bottom. We're not making a rapid breakout," said Stinson. "But things aren't really getting any worse either, if you look at things over a three- or four-month range."

Stinson says Minnesotans will have to be patient.

"This is going to be slow process as we come out this recession," he said.

But the wait is agonizing for many of the state's unemployed. Some 175,000 folks are now collecting unemployment, and a few hundred people each week are running out of benefits.

The number of people exhausting their unemployment benefits is expected to increase steadily as this year draws to a close.

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