Minn. unemployment dips to 6.5 percent in April

The two main surveys used to gauge the health of Minnesota's labor market pointed in different directions in April.

The state's unemployment rate ticked down slightly to 6.5 percent, according to a survey of households. Meanwhile, a survey of employers showed that payrolls shrunk by 5,200 jobs last month.

Steve Hine, the state's chief labor market analyst, says the decline in the unemployment rate should not be discounted. But he's skeptical of it.

"I do think we should, on balance, pay a little more attention to the payroll survey, as an indicator, which would suggest that our recovery has not been nearly as strong as the unemployment rate data would suggest," Hine said.

Much of the decline in payroll employment came from the construction sector, which dumped 5,700 jobs. It was the sector's second largest monthly drop on record. Hine says the big drop-off may have been due to the bad weather in April, which thwarted construction projects. Specialty trades workers like plumbers and carpenters took the biggest hit.

But the state's job market did have some bright spots.

Leisure and hospitality led job growth last month, adding 3,100 jobs. Restaurants and accommodations, which are sensitive to consumer confidence and spending, saw the greatest gains.

"We're certainly seeing some of the impact in some of these more discretionary areas starting to reveal a greater willingness on the part of consumers to spend," Hine said.

In addition, Hine has been noting improvements in an unofficial, wider measure of unemployment, which includes discouraged workers and those who can only find part-time work. That broader gauge of unemployment has been ticking down in Minnesota. It averaged 13.5 percent over the past year, down from about 14.1 percent in April 2010.

The current U.S. average in this broader measure was 16.4 percent last month.