Minnesota added more jobs in January than any month since April 2005, which officials said was an encouraging sign for the state's economy.
Employers added 15,600 jobs in January and Minnesota's unemployment rate fell slightly to 7.3 percent, compared to 7.4 percent in December, according to the numbers released Tuesday.
"We're encouraged by the improvement in the labor market," said Dan McElroy, commissioner of the state Department of Employment and Economic Development.
The national unemployment rate was 9.7 percent in January.
During a conference call, McElroy and state labor analyst Steve Hine said the fact that two of the sectors that added jobs -- construction and manufacturing -- hadn't seen improvements in a long time was especially encouraging.
"I've been out talking to lots of manufacturers and they're telling me that business is a little better. It isn't back to where it had been," McElroy said, adding that Minnesota had lost about 36,000 manufacturing jobs since the beginning of the recession.
Construction jobs were up by 2,100 in January, which was consistent with a recent report from housing research firm Metrostudy suggesting there could be construction employment gains from an increase in the number of new homes. The report shows that nearly 1,000 new homes were started during the fourth quarter of 2009, a 25 percent increase from 2008.
Hine said residential construction employment was still down over the year by 10 percent in January, but last year the monthly year-over-year declines averaged nearly 20 percent.
"It's a vast improvement over what we have seen," Hine said. "We'll be watching very carefully as the spring season starts."
According to the data for January, six other sectors of the economy also showed job gains. The biggest gains were in trade, transportation and utilities, and professional and business services. Each of the two sectors added 4,000 jobs.
Two areas -- financial activities and education and health services -- shed jobs, while jobs in logging and mining stayed flat.
Meanwhile, it appears more businesses are back in hiring mode. The Conference Board, which tracks information on business and the job market, reported a big jump in online want ads in Minnesota in January, and McElroy said the state's job listings Web site is also more active. There are about 32,000 jobs listed now, up from 21,000 at the end of January and 16,000 at the end of December.
Minnesota's average annual rate of unemployment in 2009 was 7.8 percent. A wider measure of unemployment, which includes people who want full-time jobs but can only find part-time employment, puts the rate at 14.2 percent in Minnesota, lower than the national rate of 16.2 percent.
Another sign the economy may be improving in Minnesota came in the state's budget forecast released Tuesday. The budget hole now sits at $994 million rather than a $1.2 billion.