State loses 2,900 jobs, unemployment rate holds at 3.7 percent

Minnesota employers shed a modest 2,900 jobs in March, as construction and health care cut employment in the state.

The change wasn't enough to move the unemployment rate, which held at 3.7 percent for the fifth straight month, according to data released Thursday by the Minnesota Department of Employment and Economic Development.

Manufacturing and back-end business support each added about 1,000 jobs. Most other industries were close to flat on the month.

Minnesota has added 35,940 jobs in the past 12 months, a growth rate of 1.3 percent that's well below the national growth rate of 2 percent.

That's in large part because Minnesota's job market recovered more quickly than most of the rest of the country. The state is at full employment, and labor force participation — the share of working-age adults either working or trying to work — rose in March to 71.2 percent, its highest level since 2010.

That's still well below the nearly 76 percent high set in 2000. A shortage of workers should keep the unemployment rate low for the foreseeable future, but it does stand in the way of job growth.

"Jobs are only counted once someone's in the job," Laura Kalambokidis, the state economist, said. "Our employment forecast is constrained by slow labor force participation growth."

In March, health care saw its first monthly decline in more than a year, and only the fifth monthly decline in five years, shedding 1,300 jobs.

Specifically, nursing and residential care facility employment was down, said Steve Hine, the state's labor market analyst. That's surprising given Minnesota's aging population and expected rising demand.

"It may be due to fairly low wages paid in that area, rather than diminished demand," Hine said. "There's a lot of evidence that these facilities are having trouble finding workers."

Construction's loss of 1,600 jobs in March was probably due to seasonal adjustment, since a warm February brought workers back to construction sites earlier than usual, Hine said.

Estimates of unemployment by race and ethnicity showed wide disparities in the state, once again. Black unemployment in March was estimated at 13.6 percent, Hispanic unemployment was 4.5 percent, and white unemployment was 2.9 percent.

Here's how the state's metropolitan areas fared over the past 12 months: job growth in Minneapolis-St. Paul was 1.8 percent, Rochester was up 2.1 percent, St. Cloud was up 1.9 percent and Mankato was up 1.4 percent. The Duluth-Superior metro area continues to be the weak spot, and was down 1.9 percent over the past 12 months.

Adam Belz • 612-673-4405 Twitter: @adambelz