Layoffs and new jobs balanced out in May for steady unemployment rate
Mike Meyers
Star Tribune
Wednesday, June 13, 2001
Greg Buck is bucking a trend. He's been hiring lately.
Productivity Inc., a Minneapolis-based company that sells and services metal shaping and cutting tools for manufacturing firms, has been looking for skilled workers in the
last couple of months even as some of its customers turned to layoffs.
"That's how we've grown," Buck said. "In difficult times, we've been able to perform better." The company tries to pick up talented employees from retrenching competitors
in preparation for more prosperous times, he said.
Buck's firm, which employs 110 in Minneapolis, recently hired four workers -- an imperceptible increase in a state job market of nearly 2.7 million. But decisions by some
companies to hire as others reduced their payrolls balanced out in May, holding the Minnesota unemployment rate at 3.9 percent.
Minnesota gained 400 jobs overall, a meager showing for a state that has averaged monthly increases of 3,000 or more in recent years.
In February, March and April this year, job growth in the state averaged about 1,000 jobs a month.
The state jobless rate was 3.3 percent a year ago.
"Most people thought that [the state unemployment rate] might dip back a little bit since it jumped a full half-percent in April," said Tom Stinson, the state economist. "It
was a little disappointing that the unemployment rate didn't drop down."
Jay Mousa, research director of the Minnesota Department of Economic Security, said the state's job market looks good compared to the nation's job picture.
"Unlike the national economy, which lost jobs in April and May, Minnesota is not losing jobs," Mousa said.
Minnesota government economy watchers hope the worst will be over soon for the state's job market.
"We're expecting in the second half of the year that the economy will pick up, as interest rate cuts and tax cuts work their way through the economy," Mousa said.
Stinson said he thinks the state's economy will "begin to grow a little faster starting late next fall. But there aren't any guarantees at this point."
Recent gains in the number of new service jobs mask declines in manufacturing jobs across the state.
Minnesota is down 6,800 jobs in manufacturing in the last 12 months, Mousa said. Service employment in the same period rose by 20,000 jobs. Both trends come against a
background of layoffs at companies trying to hold down costs to boost profits.
"We're seeing the same trend as the nation in manufacturing," Mousa said. "Many people refer to this slowdown as a manufacturing recession."
Fred Zimmerman, a professor of engineering and international management at the University of St. Thomas, said everyone should be concerned about a downturn in
manufacturing.
"When manufacturing slows down, services soon follow," Zimmerman said. "Minnesota has been living in a fool's paradise for maybe 10 or 15 years regarding the long-term
solvency of its economy."
-- Mike Meyers is at meyers@startribune.com .
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