Minnesota jobless rate dropped to 6.7% in January

The state's unemployment rate dropped slightly to 6.7 percent in January -- the lowest rate in Minnesota since December 2008.

But state job growth continues to lag, with just 2,000 jobs added in January, according to a report released Wednesday by the Minnesota Department of Employment and Economic Development.

The state's economic recovery has also been slower than originally reported , DEED officials said. Since the 2009 trough in employment, employers in Minnesota added about 19,000 jobs -- not the 33,000 first estimated.

Steve Hine, DEED's labor market information director, said Wednesday that the report provides a "somewhat mixed bag of signals."

"There's a lot of signs that the economy is certainly continuing to improve," Hine said. "Job growth of 2,000 a month is certainly not going to return us to full employment as quickly as we would like, if at all."

But Hine said seasonal adjustments could be masking pockets strength in the labor market.

The state's seasonally-adjusted unemployment rate dropped 0.2 percent from December 2010, and remains well below the national average. The U.S. unemployment rate was 9 percent in January.

Hine said the slight drop in the unemployment rate could be related to a decrease in the percent of people participating in the workforce. That percentage dropped from 71.9 percent in December to 71.7 percent in January.

"A lot of the decline in the unemployment rate has been driven by declining participation, and that's the case to some extent partially between December and January," Hine said.

In January, education and health services led the state in job growth, gaining 4,200 jobs. Leisure and hospitality gained 1,800 jobs, financial activities gained 700, logging and mining gained 500, construction gained 200, and manufacturing gained 200.

The job growth in those sectors was partially offset by losses in other industries. Trade, transportation and utilities lost 6,700 jobs in January, and government lost 200 jobs.

Over the past year, the state gained 16,500 jobs - a growth rate of 0.6 percent, compared to a national growth rate of 0.7 percent.