The jobs recovery in Minnesota took a step backward last month even before new business restrictions on restaurants, bars, and gyms went into effect.
The state lost 12,600 jobs in November, according to a survey taken the second week of that month, a week before Gov. Tim Walz’s latest executive order went into effect.
It was the first month that the state lost more jobs than it has gained since April, and basically erased most of the job gains from October.
“There was probably some anticipatory factors of not only dialbacks but also increased spread of the virus that led to a decrease in consumer confidence and activity,” said Steve Grove, commissioner of the Minnesota Department of Employment and Economic Development (DEED).
He added that the impact of the business restrictions, which was one of the major factors in the recent spike in new unemployment claims in the state, will be reflected in next month’s jobs report, which is likely to show even more economic pain.
The greatest job losses were in leisure and hospitality, which was down 10,400 jobs. Construction also lost 1,500 jobs, manufacturing was down 1,900 jobs, and transportation and utilities was down 1,200 jobs.
Government lost 2,300 jobs, largely due to the end of work on the 2020 census, officials said.
Those losses were offset by some job gains in financial activities, professional and business services and education and health services.
“I think the big picture here is that our recovery is not going to be linear,” Grove said.
But there was a sliver of good news in the monthly data released Thursday by DEED. The state’s unemployment rate fell slightly to 4.4%, from 4.6% in October.
The U.S. unemployment rate also slightly fell in November to 6.7%.
In the previous two months, the significant decline in the state’s unemployment rate had been almost entirely due to workers dropping out of the labor force. But November’s reduction was because of the opposite.
About 20,000 Minnesotans moved back into the workforce and found employment. As a result, the state’s labor force participation rate rose a half percentage point to 67.9% in November.
Grove said he thinks the uptick is likely due to people feeling the economic pinch and deciding to look for work. In addition, more self-employed individuals ramped up because they could lose unemployment benefits the day after Christmas when the Pandemic Unemployment Assistance program is set to expire.
Even so, another 80,000 workers or so in Minnesota who left the labor force in September and October remain on the sidelines.
State officials acknowledged that the two data points — the lower unemployment rate and the loss of jobs in November — seemed to point to contradictory trends. But they noted that they come from two separate surveys that measure things differently.
The payroll jobs survey does not include self-employed work, said Oriane Casale, the director of the state’s labor market information office. But the unemployment rate does count someone as employed if they are self-employed, and works as little as one hour a week.
With the November setback in jobs, the state has now regained about 50% of jobs it lost earlier in the pandemic, down from 53% in October.
More than 300,000 Minnesotans continue to request unemployment benefits, an uptick in recent weeks amid the state dialbacks and the surge in COVID-19 cases.
About 100,000 Minnesotans who have exhausted their regular unemployment payments were expected to lose their extended benefits later this month. But state lawmakers reached a deal earlier this week to extend benefits for another 13 weeks.
At the same time, federal lawmakers continue to negotiate a relief package that could provide a federal extension of unemployment benefits and an additional $300 a week in payments.
There was also some signs of improvement in November’s jobs report in the unemployment rate for workers of color, who have been disproportionately impacted during the pandemic.
The jobless rate for Black Minnesotans fell to 11.1% in November. While still quite high, that was down more than four percentage points from October when it was 15.4%. For Latino Minnesotans, the unemployment rate dropped to 7.7%, from 9.6% in October.
Kavita Kumar • 612-673-4113 Twitter: @kavitakumar