Minnesota in January saw bounceback of jobs that it lost in December

Minnesota recouped in January most of the jobs that it had lost the month before once restaurants and bars were allowed to reopen for indoor service at limited capacity.

Still, the state has a long way to go in its jobs recovery. It has gained back only 191,400 jobs, or 46%, of the 416,300 jobs it shed in the first few months of the pandemic, according to state data released Thursday.

But the January bounceback of 51,800 jobs is an encouraging sign, said Steve Grove, commissioner of the Minnesota Department of Employment and Economic Development.

That is just 1,000 jobs shy of the number lost in December when employers reacted to state restrictions put in place to address a late fall surge in COVID-19 cases. Those limitations were eased in January.

"Winter is always a tough time for recovery in this state, but we think that we're on the right path here and we're hopeful as consumer confidence continues to rise and more and more businesses are able to accelerate their growth, that we'll see even better [jobs numbers] in the future," Grove said.

He added that DEED is hearing anecdotally from restaurants and other entertainment venues that they are seeing more customer traffic now than they did in the fall. In addition, vaccines are rolling out and the federal relief package passed by Congress this week will bring the state billions more in aid. The federal legislation will also extend unemployment benefits, as well as a supplement of $300 a week, into the summer for those still out of work.

"As spring approaches, we think the horizon for our economy will be stronger and that this January jobs report we hope just shows the beginning stages of really a comeback in 2021 for Minnesota," Grove said.

In January, the state's unemployment rate declined to 4.5% from the revised December rate of 4.7%. Most of that decline though was due to 22,500 Minnesotans who exited the labor force. The state's unemployment rate remains about 2 percentage points lower than the national rate.

But the data also continue to show troubling disparities in how different demographic groups have been affected by the pandemic. The unemployment rate for Black Minnesotans in January was the highest of all groups at 9.5%, up from 9% in December, compared with 7.3% for Latinos and 5.8% for white Minnesotans. Because of smaller sample sizes, these figures are based on 12-month moving averages.

"As we've known since the beginning, this pandemic has hit communities of color more [harshly] than other demographic groups," Grove said. "We've got to really focus our efforts on recovery on helping those that have been hit hardest."

The January jobs report reflected an annual revision to employment numbers based on more complete data. Those revisions showed that the state lost 10,000 more jobs last year than originally estimated. The state's unemployment rate in the last three months of the year was also revised to be slightly higher than previously published.

In January, most of the job bounceback was from the private sector, which added 48,900 jobs, with the largest gains in leisure and hospitality, education and health services, and other services. Government added 2,900 jobs.

The biggest over-the-year job loss in Minnesota continues to be in the leisure and hospitality sector, which was down 32%, or 83,400 jobs, as of January.

Kavita Kumar • 612-673-4113 Twitter: @kavitakumar