Minn. jobless rate drops to 5.5 pct.

Minnesota's jobless rate declined to 5.5 percent in December as employers added 9,100 payroll jobs compared to November.

In the crucial holiday shopping season retailers added 3,900 jobs but the construction industry eliminated 3,500 jobs.

The November job figures were better than originally reported. That month's job count was revised from 10,800 jobs gained to 12,300 jobs added.

The state unemployment rate fell to a seasonally adjusted 5.5 percent last month, down 0.1 percent from a revised 5.6 percent in November. The November jobless rate was initially reported as 5.7 percent. The U.S. unemployment rate last month was 7.8 percent.

Steve Hine, Minnesota's chief labor market analyst, said by many measures, the state's job market is outperforming the nation's.

"With the strength in December we have now regained 71.2 percent of the jobs we lost in the recession," Hine said. "That also compares favorably with the national recovery at this point, which has regained 54.4 percent."

Before you keep reading ...

MPR News is made by Members. Gifts from individuals fuel the programs that you and your neighbors rely on. Donate today to power news, analysis, and community conversations for all.

The state has gained about 50,700 jobs over the past year, a growth rate of 1.9 percent, compared with a growth rate of 1.4 percent nationally.

"The state labor market is growing at a brisk pace, gaining more than 21,000 jobs in the final two months of 2012," said DEED Commissioner Katie Clark Sieben. "Minnesota is recovering jobs well ahead of the rest of the country and is positioned to stay on that course in coming months."

Trade, transportation and utilities led all industrial sectors in December, gaining 3,900 jobs. Other industries adding to payrolls include: professional and business services (up 2,500); education and health services (up 1,800); manufacturing (up 1,400), information (up 1,400), government (up 900), leisure and hospitality (up 800), and financial activities (up 600). Logging and mining held steady.

Hine is somewhat worried about a sector called employment services, which includes temporary help agencies. As of December, that industry's job growth had stalled.

Hine said job losses could portend a recession.

"If that does turn negative, it would be out of character, compared to the previous two recessions, for us not to go into a recession in mid 2013," Hine said.

On the other hand, Hine said temp jobs could be slowing down because companies are making permanent hires instead.

MPR reporter Annie Baxter contributed to this report.