Minnesota employers added 5,900 jobs in September, and the unemployment rate fell one tenth of a percentage point to 5.8 percent.
The U.S. jobless rate for September is 7.8 percent.
According to the Minnesota Department Employment and Economic Development, the state's job loss in the prior month was smaller than initially reported. Officials revised the August decline from 2,000 jobs to 700 jobs lost.
That brings job gains in the state over the past year to about 35,000.
Total payroll employment in Minnesota has grown by 1.3 percent in the past year, compared with a 1.4 percent growth rate nationally.
"Minnesota has recovered nearly 90,000 jobs since hitting the low point of the recession three years ago last month," said Blake Chaffee, DEED's director of communications. "The labor market has been steadily improving since then, but we still have more work to do."
Education and health services led all sectors last month with 5,600 new jobs. Other job gains occurred in leisure and hospitality (up 3,300), construction (up 1,500), financial activities (up 1,200), other services (up 1,100), professional and business services (up 800), trade, transportation and utilities (up 200), and logging and mining (up 200).
Job losses occurred in government (down 3,600), manufacturing (down 2,500) and information (down 1,500).
Steve Hine, who's the state's head labor market analyst, said housing market improvements are translating into job gains.
"There's definitely positive signs there that coincide with yesterday's report on national housing starts and permits," Hine said.
U.S. housing starts in September climbed to their highest level in four years.
The unemployment report also indicated more people were paid for work during August.
The jobless numbers, which are based on a survey of households, indicate nearly 5,500 more people were paid for work in August compared to July.
There were 2,300 fewer people who were unemployed, and the labor force, the number of people who have or are looking for a job grew as well.
Meanwhile, the Dayton administration announced a change at the top of DEED. Katie Clark, executive director of the Minnesota Trade Office, is replacing Commissioner Mark Phillips, who is leaving Friday, "to seek opportunities in the private sector."
(MPR reporter Annie Baxter reported to this report.)