Published November 17, 2014
The Minnesota government shutdown is already a memory, but its consequences were felt Friday in a national hiring report that had a gloomy outlook for government jobs.
The U.S. Department of Labor's July hiring report showed a slight uptick, with employers adding 117,000 jobs — the best figure in three months. Private business added 154,000 jobs nationwide, but that didn't correspond to government employment, with about 37,000 jobs lost.
Turns out well more than half of those were the 23,000 Minnesota state employees temporarily laid off as a result of the 20-day shutdown that started July 1. They've now been back to work for about two weeks, after Democratic Gov. Mark Dayton and legislative Republicans finally agreed on a new, two-year budget.
"I guess you'd call that a little hiccup," said Paul Anton, a Minneapolis economist. "Obviously that should reverse itself when the August numbers come out."
Still, government hiring overall has suffered in recent months as governors and state lawmakers have struggled to balance their budgets and make up for sagging state revenues. Louis Johnston, an economics professor at St. John's University near St. Cloud, said various levels of government nationwide have shed about 200,000 jobs total since the beginning of the year.
"That's the price of austerity," Johnston said.
Among the industries that added workers in July were retailers, factories and health care firms.
The most recent report on Minnesota's unemployment rate, prior to the shutdown, found the state added 13,200 jobs in June. That wasn't enough to dent the overall 6.7 percent unemployment rate, with economists saying that long-term, sustained job growth is needed to bring it down significantly.
The shutdown is certain to negatively impact Minnesota's July job numbers when they are released later this month.
The slight uptick in jobs nationally helped the U.S. unemployment drop a tenth of a percent from June to July — not enough to foster optimism about the economy, but enough for economists to say another recession has been held off for the moment.