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Minnesota unemployment rates dipped to 8.6% in June, down slightly from May

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ST. PAUL Minnesota's seasonally adjusted unemployment rate fell to 8.6% in June as bars and restaurants reopened across the state.

Loosening coronavirus pandemic restrictions saw the state's leisure and hospitality industry add approximately 35,000 jobs last month, more than any other sector, according to a jobs report released Thursday, July 16, by the Minnesota Department of Employment and Economic Development. Though the state's overall unemployment rate for June was down slightly from the record high of 9.9% observed one month earlier, it was still double that of what officials reported before in the months before the pandemic struck.

In a news release, DEED commissioner Steve Grove said Minnesotans would have to don masks and continue practicing social distancing for business to remain open and the economy to improve.

"To continue to see positive trends in our economy, we need to continue to be safe as we reopen our economy to avoid the volatility we're seeing in other states that are dialing back due to troubling COVID-19 outbreaks," Grove said in the release.

All told, Minnesota added 84,400 payroll jobs last month in the continuation of an unemployment rate trend that outperforms the nation's. The U.S. unemployment rate for June dipped to 11.1% with the addition of 4.8 million jobs, down from the prior month's rate of 13.3%.

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The number of unemployed people in Minnesota decreased by 35,440 to 267,526 in June while the number of employed people rose 81,822 to approximately 2.85 million. Employment in the state stood at 2.8 million in April, for comparison, though the state's labor force is still roughly 5,000 workers shy of what was reported in February this year.

Labor force participation in Minnesota measured 69.9% in June, slightly higher than it did in March.

Job gains for May were revised upward from the 9,800 that was first reported to 26,200, up 1%. In a phone call Thursday, DEED labor market information officer Oriane Casale said the revision illustrates just how many shuttered businesses are moving to recall workers and reopen shop.

A similar-sized revision might be in store for June.

" I’ve been in this business for 22 years and I’ve never seen these kinds of revisions," Casale said.

But in a somewhat troubling sign, three of the state's "super sectors" reported job losses even though they weren't affected by pandemic-related restrictions. Approximately 200 construction jobs were eliminated in June, down 1.6% from May, while information lost 200, down 0.5%, according to the report.

The financial activities sector, meanwhile, lost 1,500 jobs in a decrease of 0.8%.

Thursday's report comes ahead of what officials expect will be the end of the federal program bolstering unemployment insurance payouts by an additional $600 a week. Congress has given little indication that the program will continue after the week ending July 25.

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Critics of the program, which in some cases has paid unemployed persons better than their old jobs, say that it creates an incentive to not seek work. But in a phone interview Thursday, Grove said the program's end could still be disruptive even as firms begin to hire anew.

"There are firms hiring but not enough, I think, to absorb the loss we're going to see if these benefits aren't extended," Grove said.

DEED officials are encouraging individuals who may lose their federal unemployment boost, Grove said, to seek out other, state-sponsored aid programs if they still require financial assistance. State officials said the expiration of the program is partly what compelled them to commit $100 million of federal pandemic stimulus funds to the new housing and rent assistance program targeting low-income Minnesotans announced earlier this week.

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