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Number of jobs is up, but so is unemployment rate

Duluth and much of Northeastern Minnesota had bragging rights last fall as the jobless rate hit lows not seen since before the recession.

But since the unemployment rate bottomed out at 4.6 percent for Duluth and 5.3 percent for Northeastern Minnesota, unemployment has been climbing ever since.

Duluth’s unemployment rate rose to 6 percent in February, while the region reached 7.4 percent, according to Minnesota Department of Employment and Economic Development data released Tuesday.

The increases came as the number of jobs declined, more people collected unemployment and the size of the labor force — the number of people working and actively looking for work — seesawed.

Each winter, unemployment sees an uptick in the region, as construction, tourism and other seasonal workers are laid off. The rise in unemployment usually starts in January. But this year, unemployment started climbing in November.

Why?

“It’s been a difficult winter,” said Jan Saxhaug, DEED’s labor market analyst for the region. “That always affects employment. An early winter and late spring are not good for the construction sector or the tourism sector.”

While normally a lot of snow is good for winter tourism, the Northland’s extreme cold in December, January and February hurt big time, discouraging skiing and other outdoor activities and causing ski hills to close more days.

“The over-the-year numbers are what’s important,” Saxhaug said.

Compare Duluth and the region’s February jobless rates with previous Februarys and the downward trend is apparent, as the region recovers from the recession.

Despite the recent four-month rise in unemployment, the Minnesota WorkForce Center in Duluth hasn’t seen a significant increase in usage by job-seekers, said Betsy Harmon, the center’s job service manager.

They don’t typically see laid-off seasonal workers, however. And if they’re affiliated with a union, the WorkForce Center doesn’t see them at all, she said.

Some areas in Northeastern Minnesota are affected more by seasonal work. Among them is Grand Rapids, where unemployment rose to nearly 12 percent in February.

“A high percentage of people in Grand Rapids are working seasonally,” Saxhaug said. “A lot of people will not work in the winter and go back to work when it warms.”

Even as unemployment increased, more jobs are being posted, Harmon said.

“We’ve noticed postings going up,” she said. “Yet, the numbers say more people are unemployed.”

That, she says, means more people are returning to the workforce, which can bump up the jobless rate.

“People that may have not been looking for a while, come in and say they need help with resumes and with interviewing skills,” Harmon said. “We’re actually seeing a lot of that. Our workshops fill up.”

The statistics bear that out.

Even though the job numbers are down in recent months, the numbers of jobs in the greater Twin Ports area has increased from the recessionary low of 124,340 in January 2010 to about 134,800 in February 2014, state data shows. That’s approaching pre-recessionary levels. The Twin Ports area includes all of St. Louis, Douglas and Carlton counties.

The growth is coming from the private sector, which reached its highest level in 24 years in February, Saxhaug said.

“It tells me the private sector is recovering quite nicely, adding jobs on a month-to-month basis,” he said. “Over the last year, the government jobs are down almost a full percentage point, while the private sector is adding jobs, setting records.  The private sector is leading the economic recovery. And that’s a good thing.”

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