Minnesota got some good -- though certainly not great -- news about its economy Thursday. The state's unemployment rate held steady in November at 7.1 percent, far below the national average.
And economists at the Minneapolis Federal Reserve Bank forecast the state's economy will "warm up" next year, with employers adding perhaps 50,000 jobs.
Dan McElroy, commissioner of the state Department of Employment and Economic Development, was hoping for a better unemployment report. The state had added some 16,000 jobs in October, and McElrory hoped that job growth would continue. But the state lost 5,100 jobs in November. That, combined with other factors, kept the unemployment rate steady.
"I would have liked to have had more jobs announced and a lower unemployment rate," he said. "All in all, in this recessionary environment or slow recovery environment, this isn't too bad."
Minnesota lost jobs in the leisure and hospitality, financial services, and education and health services sectors. The state added jobs in the government, professional and business services, and manufacturing sectors. The factory sector has been one of the strongest of late.
McElroy noted that Minnesota not only has a much lower unemployment rate than the nation, but it's also far outpacing the nation in creating jobs. So far this year, Minnesota has added nearly 45,000 jobs -- an annual growth rate of 1.7 percent.
"We're still growing at three times the national rate of employment," he said. "We still have an unemployment rate 2.7 percentage points below the nation. But we hope it will get better. The comparison to other states currently is little comfort to those who need jobs."
McElroy was heartened by the results of a department survey of Minnesota manufacturers. Manufacturing companies have added nearly 13,000 jobs in the state this year. And McElroy says next year is looking good on the employment front, too.
"More than half of the manufacturers surveyed saw increased orders and production in 2010 over 2009," he said. "A third hired new workers in 2010. More than half expect orders and production to increase in 2011. And about a third plan to increase hiring."
Over at the Federal Reserve Bank of Minneapolis, economists offered their annual economic outlook for the Ninth Federal Reserve District, which includes Minnesota. The Fed's economists were upbeat -- though certainly not bullish -- about 2011.
"The mild economic recovery currently underway is expected to warm up in 2011," said economist Toby Madden.
Madden and his associates forecast personal income for Minnesotans will increase by nearly 5 percent overall next year. And they're predicting Minnesota's unemployment rate will hover around 7 percent next year, even as the state will add a projected 50,000 jobs. The state hasn't added that many jobs in a year since 2000.
The Fed expects unemployment will remain level, because people who had given up looking for work will start looking for jobs again. But they aren't likely to find work in construction, since the housing sector remains in a deep funk.
Madden said the most significant change for Minnesota is the renewed confidence of business leaders have in the outlook for their companies.
"After being pessimistic for a couple of years, they're back and being optimistic again," said Madden. "They're looking to see sales increase, see revenues increase. They're looking to see employment and capital investment increase. So, hopefully that would spill down to the common person on the street."
In Minnesota, the Fed's survey of business leaders found about two-thirds of them are somewhat or very confident their businesses will do well in 2011. However, they're less certain about the state as a whole. Just one in four business leaders feel the state's economy will do well.