Minnesota hits end of $300 weekly jobless bonus; jobs recovery sped up last month

Minnesota exhausted its share of funds from a temporary federal program providing a $300 weekly bonus to unemployment payments, officials said Thursday.

That will affect most of the 320,000 Minnesotans who continue to collect jobless benefits six months into the pandemic.

At the same time, new data released Thursday show Minnesota's job recovery sped up a bit last month with the addition of 40,500 jobs. That was better than July but not as good as June.

The state's unemployment rate fell slightly to 7.4% in August, down from 7.6% in July. It has continued to come down since reaching a historic high of 9.9% in May, but remains more than double than what it was before the pandemic.

By comparison, the U.S. unemployment rate fell to 8.4% last month from 10.2% in July.

Steve Grove, commissioner of the Minnesota Department of Employment and Economic Development (DEED), said federal officials have told the agency that there is only enough money in a disaster relief fund to cover six weeks of $300-a-week payouts to states. And DEED has now paid out all six weeks to out-of-work Minnesotans. He added the state applied for a seventh week just in case more funds surface.

"We believe it's done," Grove said. "We will of course monitor for more, but for now it looks like we've capped at that six-week mark."

The additional unemployment boost was a partial replacement for the $600 a week unemployed workers received through July as part of the federal CARES Act. Congress and the White House have not been able to agree on a new corona­virus relief package since then.

Minnesota started sending out the additional $300-a-week payments, which were retroactive to August, a couple of weeks ago. The last payment, which went out this week, was for the week ending Sept. 5.

There's also typically a 26-week cap in receiving state unemployment benefits, which some workers who lost their jobs at the beginning of the pandemic may be nearing. But Grove noted that there's a state provision that calls for benefits to be extended when the unemployment rate is above 6.6%.

"Thankfully, because of that trigger, we've been able to continue benefits even for those whose benefits would have otherwise expired," he said.

Minnesota has now recovered just under half of the jobs it lost in March and April when businesses shuttered as the corona­virus outbreak spread in the U.S.

While the August bounceback was not as strong as June, it was bigger than July when the state added 34,600 jobs. The July jobs figure and unemployment rate were slightly revised from last month.

"While some jobs are coming back, they're not coming back at the same level for all occupations," Grove said. "Of course, that means a lot of workers in Minnesota have to look at changing career paths, finding new in-demand jobs."

He added that Minnesota's job growth in August was slightly higher than the nation's, an encouraging trend after trailing it in previous months.

The biggest gains came from government, which added 11,100 jobs. Additional hiring for the federal census drove some of that growth. Leisure and hospitality, which has seen the steepest job declines during the pandemic, picked up 7,800 jobs but still remains 27% below where it was a year ago.

Education and health services as well as manufacturing also saw sizable job gains last month.

Jobs in a handful of sectors — retail, professional and business services, and food manufacturing — have showed a stronger rebound in Minnesota compared with the nation. In fact, officials noted that retail jobs have made a full recovery in Minnesota.

Large racial disparities in the jobs recovery also continued last month, with the six-month moving average in the unemployment rate for Black Minnesotans coming in at 16.3%, compared with 6.7% for white workers.