MN Job Watch – January 23

MN Job Watch As expected, MN unemployment jumped again in December, to an official 6.9 percent. Official MN unemployment increased by 13,900 workers, which raised the total number of unemployed MN workers to 202,800. Jeff van Wychen in MN 2020 writes that is probably the highest number since the Great Depression. Employers cut 11,800 jobs in December, and November’s job loss numbers were revised upward (surprise!) to 13,366. According to the MN Department of Employment and Economic Development:

Overall, there were 2.9 unemployed workers for each job vacancy statewide. This ratio indicates that the second quarter 2008 labor market was the least favorable for job seekers during the history of the job vacancy series dating back to fourth quarter 2000.

The Strib put a hopeful headline spin on the bad news saying the report “hints slide may be nearing bottom.” Not clear to me that there’s any factual basis that conclusion.

In rare good news, despite Microsoft’s plan to cut 5,000 jobs worldwide, the software giant says it still plans to open a new software development office in the Twin Cities. Leslie Brooks Suzukamo reports in the PiPress that the office will employ fewer than the originally-planned 55 employees. It’s not clear how the worldwide job cuts will affect about 100 employees in Microsoft’s Bloomington sales office. And on another front, Session Daily reports that, “It may not be the best deal Minnesota could get, but an airline agreement will still keep thousands of jobs in the state.”

NPR’s Planet Money notes that jobless claims nationally continue to rise, with the labor market “a disaster area,” and that other indicators also point downward, with housing starts dropping and the Consumer Price Index continuing a deflationary downturn. You might think lower prices are good, but the experts say that’s not necessarily true. NPR quotes High Frequency Economics’ chief economist Carl Weinberg to explain why:

If people perceive themselves to be bogged down in a deflation, they will behave accordingly. They will defer purchases because they expect the price of a new coat or refrigerator or iPod to be lower in a few months than it is right now. Indeed, all the people in the world who are deferring house purchases rather than borrow money to buy a depreciating asset . . .are demonstrating deflationary behavior. . . . This will make the recessions in the developed market economies worse than they might have been in an environment of rising prices.