Minnesota Endures Worst Employment Skid in 30+ Years

Minnesota’s seasonally adjusted unemployment rate now stands at 6.9 percent, according to new December 2008 numbers released by the Minnesota Department of Employment and Economic Development. The data continues what, by many measures, are the worst statewide jobless numbers since the collection of monthly data by the Department began in January 1976.

The first bit of sobering news for the Gopher State is that the unemployment rate rose 0.5 points during the past month – solidifying 2008 as the most volatile year on record. Unemployment increased by at least 0.4 points in five month-to-month periods last year – from April to May (0.6 points), June to July (0.5 points), July to August (0.4 points), October to November (0.4 points), and November to December (0.5 points). By comparison, monthly jobless increases of 0.4 points or larger had occurred in just 7 out of the previous 383 months, dating back to early 1976. (March to April 1979 (0.5 points), May to June 1980 (0.5 points), September to October 1981 (0.4 points), February to March 1982 (0.4 points), March to April 1982 (0.4 points), June to July 1982 (0.6 points), and August to September 1998 (0.4 points).

Additionally, the unemployment rate in Minnesota is now at its highest rate since January 1984, but that does not even begin to tell the story of the precipitous decline experienced in 2008. Looking at end of the year, December-to-December numbers from 1976 through 2008, the 2.2-point jobless increase from December 2007 (4.7 percent) to December 2008 (6.9 percent) was the second largest increase during this 30+ year span – behind only the 2.4-point jump from December 1981 (6.4 percent) to December 1982 (8.8 percent).

Finally, the last 12 months also mark the single largest end-of-the-year percentage increase in unemployment in the Gopher State on record at the DEED – a 46.8 percent rise from December 2007 to December 2008. That is nearly a 7-fold increase from December 2006 to December 2007 (6.8 percent), and a more than 20-fold increase from December 2005 to December 2006 (2.3 percent). The previous largest December-to-December percent increases were 1981 to 1982 (37.5 percent rise) and 2000 to 2001 (33.3 percent).

With devastating numbers like these, it is little wonder Governor Tim Pawlenty put in some face time in Washington, D.C. during inauguration week to state his support and good wishes for President Barack Obama. No doubt the Governor would also appreciate federal support in kind to alleviate the serious economic problems the state of Minnesota (and much of the nation) is now facing.

End-of-Year Unemployment Rate Change in Minnesota, 1976-2008

Note: Denotes December-to-December changes; data compiled from the Minnesota Department of Employment and Economic Development.