Minnesota economists see improvement on the horizon

The Federal Reserve Bank of Minneapolis predicts employment growth in 2004.

by Dan Haugen

Job-hunting seniors who have followed economic news lately might be apprehensive about entering the job market this spring.

While the economy has shown signs of rejuvenation – stock markets and the gross domestic product, for example, have gone up – employers have put off new hiring. Nationwide, companies added 1,000 jobs in December, according to the Labor Department.

The Minnesota Department of Employment and Economic Development announced Tuesday that the state’s unemployment rate increased 0.3 percent last month to 4.5 percent.

While it is too soon to tell for sure, local economic researchers say there are indicators that the job market should be slightly better come commencement.

“We’ve seen some definite signs of improvement,” said Steve Hine, the Minnesota Department of Employment and Economic Development director of research. “Improvement is showing up most vividly in occupations and sectors in which education is a key.”

Those areas include science and technology fields, such as medical device manufacturing.

Hine also said the number of unemployment claims filed by workers in computer-related fields fell significantly in recent months.

The U.S. Bureau of Labor Statistics reported a 9.2 percent increase in productivity for the period between July and September, the most recent quarter available. Hine said it is unlikely companies could sustain such a pace, meaning they will probably respond to rising demand by adding positions.

The Federal Reserve Bank of Minneapolis predicts employment will increase 0.7 percent in Minnesota during 2004, compared to 0.3 percent nationally.

Area business leaders appear to have shed some pessimism, said Toby Madden, a regional economist for the Federal Reserve Bank of Minneapolis.

The bank conducted an annual survey of Midwest business leaders in November, and a third of those who responded said they anticipate employment growth in 2004.