Wells Fargo sees tepid economic growth for Minn.

Wells Fargo economists are projecting tepid job growth for Minnesota in 2012.

Over the year ending in October, payrolls in the state grew slower than the relatively weak U.S. growth rate of 1.2 percent over the same period.

Scott Anderson, a Wells Fargo economist, said he expects jobs in Minnesota to pick up by only 0.8 percent next year.

He notes that job losses in September and October in Minnesota could give a hint of trouble spots ahead.

“The fact that we had two consecutive months of job loss is somewhat concerning. But more concerning is where those jobs are being lost. It’s in wholesale trade, transportation, and manufacturing,” he said.

Anderson said those sectors had been leading the recovery in Minnesota. He thinks they may now be reflecting the trouble in Europe that some economists say will trigger a global slowdown.

He said that will mean Minnesota’s export market, which had been a bright spot, will likely take a hit.

The Wells Fargo report also forecasts some improvement in Minnesota’s housing market. Anderson noted that Twin Cities home prices are still down significantly compared to last year but seemed to pick up slightly over the summer.

In addition, inventories of homes for sale are decreasing, which could push prices higher.

That’s all giving him reason for measured optimism.

“We think housing is maybe on an upturn swing here for 2012 in Minnesota, but because of the declining outlook on the economy overall it’s going to be a long slog ahead,” he said.

Anderson notes that while residential building permits are stilll at low levels, he expects new home construction will hit bottom and begin to pick up sometime in 2012.

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