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Jobless rates began to drop in July in the Northland

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business Duluth, 55802

Duluth Minnesota 424 W. First St. 55802

In late summer, Northland jobless rates typically start dropping in a headline-grabbing decline that can continue until December.

But it apparently started early this year, thanks to the boom in construction projects.

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Instead of continuing the typical summer unemployment uptick in July, Duluth’s jobless rate slipped from 5.3 percent in June to 5 percent in July, according to recent data from the Minnesota Department of Employment and Economic Development.

The greater Twin Ports area — which includes all of St. Louis, Carlton and Douglas counties — echoed the job gains, with the unemployment rate slipping from 5.8 percent in June to  5.5 in July.

“It’s a good sign,” said Cameron Macht, DEED’s regional analysis and outreach manager. “There must be a lot more employment activity going on this year compared to last year.”

The numbers bear that out.

Mining, logging and construction jobs in Northeastern Minnesota were up 10.3 percent in July compared to July 2013, while leisure and hospitality jobs were up 1 percent over last year, the data shows.

“It means construction projects are going better than anticipated,” Macht said. “Also, hospitality is doing more hiring than in past years.”

The decline in the July jobless rate was even greater in Northeastern Minnesota as a whole. Unemployment dropped from 6 percent in June to 5.5 percent in July. Contributing to the drop was the growth of nearly 1,000 jobs while 800 fewer people collected unemployment.

Recovered economy

The unemployment levels reached in Duluth and Northeastern Minnesota in July is further evidence that the economy has recovered, experts say.

“The state of Minnesota reached the break-even point earlier this year,” Macht said. “We’re seeing that in the other parts of the state as well.”

Not only are jobless rates similar to pre-recession levels, but the number of jobs, the size of the labor force and the number of people on unemployment all are back to pre-recession levels, too. In fact, the total number of jobs in Northeastern Minnesota last month exceeded the number of jobs in pre-recession 2007, records show.

The number of people collecting unemployment in Northeastern Minnesota in July, which was 9,400, was half the number during the height of the recession.

“We still have challenges in the labor market,” Macht said. “Some people are underemployed or working part time. But overall, things are significantly better.”

And if seasonal patterns hold true, the unemployment rate is bound to decline further in the coming months.

Grand Rapids takes a dive

While the jobless rate dropped around the region, Grand Rapids stands out.

There, unemployment has been dropping dramatically since it reached nearly 12 percent in February. In July, it dropped more than 2 percentage points to 6.9 percent.

“There is a lot of activity going on in Grand Rapids, a lot of construction is going on and more is planned,” said Bud Stone, president of the Grand Rapids Area Chamber of Commerce.

Minnesota Power is in the middle of retrofitting the Boswell Energy Center Unit 4 near Grand Rapids, and Magnetation is building its fourth iron ore processing plant near the city and is doing a lot of hiring. In addition, apartment buildings and assisted living facilities are being built.

“All of a sudden, it seems like everybody’s building something,” Stone said. “There’s a lot of opportunity in Grand Rapids and a lot of jobs.”

The Northland’s employment gains come as the Minnesota’s jobless rate held steady at 4.5 percent in July; the nationwide rate edged up from 6.1 percent to 6.2 percent. State and national rates are seasonally adjusted, however, while local rates are not.

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