Snow, cold wiped out nearly 9,000 Minnesota jobs last month, may signal a bigger turn

Cold weather and heavy snow pushed more than 6,000 Minnesota construction workers off the job in February and lifted the state's unemployment rate for the second month in a row.

The new data released Thursday by the state jobs agency also showed the first decline since 2010 in a 12-month measure of Minnesota's job market.

It's the latest evidence that the state's workforce of nearly 3 million people may be at a peak in the current economic cycle, which has been moving upward for nearly a decade.

For four months last year, Minnesota's unemployment rate was just 2.8 percent, the lowest since 1999. Last month, it inched up to 3.1 percent from 3 percent in January as the state lost 8,800 jobs overall.

Steve Grove, head of the state Department of Employment and Economic Development, said that the construction-led losses were "not shocking given the brutal February weather."

But he added that Minnesota employers are also contending with slow growth in the labor force. "We can't have job gains without people to fill the positions," he said.

Monthly data is volatile, however, and hiring in the construction sector may recover quickly with the arrival of better weather.

But the agency's report contained another hint that the direction of the labor market may be changing: Minnesota lost 1,300 jobs in the 12 months ending Feb. 28. The last time the state lost jobs over any 12-month period was in the year that ended July 2010.

The data emerged on a day when another new study showed Minneapolis-St. Paul experienced some of the fastest economic growth among the largest 100 cities during 2017, but that prosperity remained divided among racial lines in the region.

The report by the Brookings Institution underscored the difficulty the Twin Cities has had undoing the economic damage caused by past racial discrimination and the less overt unfairness that still occurs. The region was among the top 20 cities in narrowing the employment gap between white and nonwhite employees during 2017, that study found. But it was in the bottom 20 cities in narrowing the income and poverty gaps between whites and nonwhites.

"We have to address internal workplace culture and bias," said Tawanna Black, chief executive of the Center for Economic Inclusion, a Minneapolis nonprofit organization. "We can't afford to pay talent less than what it's worth."

As the economic expansion that began in 2009 extended, hiring accelerated and employers in Minnesota and around the country reached deeper into the job pool for more workers. Wage growth lagged hiring growth but also started to pick up in the last few years.

Minnesota needs more time with a high level of employment to begin to narrow some of the pay and wealth gaps between whites and nonwhite workers. In 2017, the median wage for white employees in the Twin Cities grew while that for nonwhite employees fell, widening the gap by nearly $5,000 to about $17,000.

Over a 10-year period from 2008 through 2017, the Twin Cities performed slightly better in narrowing the difference between wages and wealth along racial lines, though still below average.

Black said public officials and business executives around the region recognize the need to create an economy that works for everyone. "Nobody thinks we have it figured out," she said. "We're running fast but never fast enough to keep up with the economy."

For now, the state's job data is signaling caution for the first time in years. In addition to the loss of 6,200 construction jobs last month, Minnesota's professional and business services sector dropped 3,500. Leisure and hospitality employers added about 3,900 jobs and financial companies added about 2,500.

Evan Ramstad • 612-673-4241