Labor Market Index

The Minnesota Labor Market Index, recalibrated using recently revised 2008 and 2009 employment data, shows Minnesota’s economy did bottom out last June but bounced along the bottom for most of the rest of the year before slowly turning upwards late in 2009.  After a big jump in July Minnesota’s index skidded for three consecutive months before advancing over the final two months.  The end of the year increase was the first back to back monthly jump since late 2007.  Raising adjusted manufacturing hours along with declining adjusted initial claims for unemployment benefits pushed the index upwards despite continuing employment losses.

The U.S. index increased for the fourth straight month in December indicating that the national economy is also beginning to recovery.  Minnesota’s index fell 6.4 percent between December 2008 and December 2009 compared to the 8.5 percent nationwide decline.  On an annual average basis, which incorporates monthly movements during the year, Minnesota’s index dropped 14.0 percent in 2009 while the U.S. index fell 17.5 percent.  Minnesota’s previous worst annual average declines were in 1982 and 1975 with drop offs of 7.7 and 5.0 percent, respectively.  The U.S. index also recorded its previous worst declines during those years, declining 11.0 percent in 1982 and 10.6 percent in 1975.  

Source: Minnesota Employment Review, DEED.