Minnesota lost 6,300 hundred jobs in September compared to August, and the state's unemployment rate now stands at 4.9 percent. The national unemployment rate in September was 4.7 percent.
State officials said job declines in September were spread widely throughout the economy, with eight of 11 broad classifications losing jobs.
Construction saw the sharpest decline, with a loss of 2,800 jobs, followed by government, down 1,300, and leisure and hospitality, which lost 1,200 jobs.
"The downturn in the housing market is seriously affecting our economy. We have seen job loss in the home lending industry and a significant slowdown in home construction," said Department of Employment and Economic Development Commissioner Dan McElroy.
McElroy said the number of people in the workforce also increased in September, which contributed to the higher unemployment number.
State Economist Tom Stinson said Minnesota added just 9,800 jobs between September 2006 and September 2007, which is troubling.
"The jobs production and economy has just been stagnant since January," he said. That's not a position that we're used to seeing the Minnesota economy in and it's a little disconcerting."
Stinson said there isn't much the state government can do to jump start the economic outlook. He said he expects the national economy to be weak for the next year or so.