MANKATO — The state continued to claw back some jobs in October, but the coming four-week shutdown of bars, restaurants and health clubs will bring a new round of unemployment claims.

Compared to a year earlier, all areas of the state had fewer jobs, with the Mankato-North Mankato region seeing a 5.2% decline in jobs in October compared to a year earlier, according to figures released Thursday by the Department of Employment and Economic Development.

Oriane Casale, DEED’s labor market information director, said during a press conference that the Mankato and St. Cloud regions have been faring better than other parts of the state.

The greatest job losses have been in the Twin Cities and Duluth. “Southern Minnesota, Mankato and St. Cloud are doing a little better,” she said.

Year over year, Minneapolis-St. Paul job numbers were down 6.2% in October, Duluth down 8.1%, Rochester down 5.9% and St. Cloud down 3.4%

Blue Earth and Nicollet counties combined lost 3,144 jobs year over year. Employment stood at 57,750 in October compared to 60,894 a year earlier.

Locally, manufacturing jobs were down less than 1% year over year while service jobs were down 6.2%. Locally, the government sector added 2.6% to job numbers compared to a year earlier.

The number of unemployed workers in Minnesota fell to 137,359 in October, down 44,573 from September, and down 165,607 since May, when the number peaked at 302,966.

DEED Commissioner Steve Grove said in the press conference that the state has recovered more than 52% of the jobs lost earlier in the pandemic.

But he said there is a worrisome trend of more Minnesotans leaving the labor force, at least temporarily, and said the coming shutdown of some businesses “will cause some short-term pain” for businesses and employees.

Gov. Tim Walz this week ordered that starting midnight Friday bars, restaurants and fitness centers are barred from allowing customers inside, with restaurants returning to carry-out orders only.

“COVID has brought unprecedented challenges to Minnesotans and our businesses. Just yesterday we had to take action to slow the spread of the virus because the health and well-being of Minnesotans and our state’s economy depend on it,” Grove said.

He said if the state can turn around an alarming increase in cases, it would be poised to fully recover much more quickly and robustly. If residents follow safety guidelines and bring COVID under control by the coming spring and summer, he expects the economy to fully recover by the third quarter of 2022. If numbers continue to surge, that full recovery won’t likely materialize until the third quarter of 2023, he said.

“The fate of our economy is in the hands of Minnesotans,” Grove said.

Leaving the force

Minnesota’s seasonally adjusted unemployment rate dropped significantly in October, down to 4.6% from 5.9% in September.

But that unemployment rate drop was due entirely to more people leaving the labor force and not looking for work.

The state’s labor participation rate fell to 67.4% in October, the lowest it’s been since 1978. “That drop is worrisome,” Grove said.

However, the state has a higher participation rate than the nation and Casale and Grove said they believe the people leaving the workforce now will return to look for and find work.

Casale said the likelihood is that people are dropping out of the workforce to take care of children or family members during the pandemic or have health and safety concerns about working during the pandemic.

“I think people are aware there are jobs out there and they’re making decisions of not participating based on other issues,” she said.

Benefits available

Grove encouraged those affected by the shutdown, or others who are furloughed or lose their jobs, to file for unemployment insurance benefits.

“Benefits are there and they’re not going to go away,” he said.

Even those who have hit or will hit their maximum weeks collecting benefits will continue to get them at least through the end of the year and likely into next year. Congress extended the benefit period through this year and can extend it again. Even if Congress doesn’t act, Grove said there are mechanisms in place that could extend benefits next year.

He said the state is $740 million in debt to the federal government as Minnesota takes federal loans to keep the unemployment insurance system funded. Virtually all states have been borrowing from the federal government to meet the unprecedented demand for benefits.

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