Hey labor force, where you going?

The most surprising data coming out of today's Minnesota June jobless report is the fact that some 14,000 Minnesotans left the labor force during the month.

What's that about?

Some of it's due to the end of 3,700 temporary Census jobs.

But the improving economy was supposed to be bringing discouraged workers back into the labor force.

Some experts had anticipated a rise in the unemployment rate as those who gave up looking for a job began looking again (and so would get counted in the labor force data).

But after a steady climb, the seasonally adjusted labor force in June is back to about where it was in January.

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And while the June drop amounts to just under a half percent decline in Minnesota's labor force, it's the biggest monthly decline we've seen in years.

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MPR will be reporting on the issue later today using sources from our Public Insight Network.

My colleague Elizabeth Dunbar reported this morning:

Officials said they don't know why so many unemployed Minnesotans are no longer seeking jobs, which means the state doesn't include them in the labor force for statistical reasons. The state work force participation rate is now 72.2 percent, while the national rate is 64.7 percent.

"It's certainly I think reasonable to speculate that some of this nearly 14,000 person departure, has been driven by some discouragement," said Steve Hine, the state's labor analyst.

But Hine said it's easier to see that as a national trend rather than a Minnesota one. The state has gained some 17,000 jobs in the last two months, an encouraging sign for workers.

"I'm a little hard-pressed to sort of understand that," he said of the declining work force participation rate.

My colleague Bob Collins wondered aloud back in December about who were these "discouraged workers" who were leaving the workforce in a recession?

We've tried before to get at the idea of Minnesota's real unemployment number.

Today's drop in Minnesota workforce could be just one other aberration in a recession full of aberrations.

But at this point in the "recovery," we're supposed to be talking about people who'd given up looking for work who are now encouraged enough that they are looking for work again.

Here's the historical data for Minnesota's work force, employment and unemployment.

Tell us what you see.

UPDATE: We asked economist Louis Johnston of the College of Saint Benedict and Saint John's University to take a look at the data and share some thoughts. He writes:

As Steve Hine said, Minnesota is following the national trend, with the (labor force participation rate) falling both in Minnesota and nationally.

That said, we still don't know why they both fell in June. It could simply be a sampling issue. (The federal Bureau of Labor Statistics) says that for May, the labor force participation rate in Minnesota could have been as low as 71.3% or as high as 74.

Thus, there may have been no real change from May to June, just noise introduced through the survey.The data show that Minnesota is still doing better than the national average.

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Definitions from Department of Employment and Economic Development "Measuring Unemployment" report, December 2009.

The "civilian labor force" is the sum of the employed plus the unemployed.

The employed are all people who, during the reference week,

a) did any work at all as paid employees, worked in their own business, profession or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of their family, and

b) all those who were not working but who had jobs or businesses from which they were temporarily absent.

The unemployed are

a) people who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find work sometime during the four-week period ending with the reference week, and

b) people who were waiting to be recalled to a job from which they had been laid off, regardless of whether they have been looking for work.

Workers who are "marginally attached" are people who wanted to work and had looked for a job sometime in the prior 12 months.

"Discouraged workers" are people who stopped looking for jobs because they believe none (are) available for them.

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