Minnesota employers added 9,500 jobs in October, capping a three-month run of vigorous job growth that has helped the state overcome a sluggish start to 2014.

The unemployment rate fell to 3.9 percent, the state's lowest level since June 2006, and nearly two points below the U.S. rate of 5.8 percent.

The October gains, combined with an upward revision to September's figures, brought job growth over the past three months to 28,300 in the state, according to preliminary figures released by the Minnesota Department of Employment and Economic Development on Thursday.

"October extended what's becoming a pretty strong string of months here," said Steve Hine, the state labor market economist.

Businesses are growing more optimistic and making plans to invest in equipment and workers, said Toby Madden, an economist at the Federal Reserve Bank of Minneapolis who regularly surveys companies in the state.

"The Great Recession is still a memory, but it's a little further off than it was a year ago," Madden said.

Hine

The low official unemployment rate is even starting to become a challenge as the pool of available workers continues to shrink, Madden said. The labor force in the state — the number of people either working or looking for a job — grew for the second straight month in October, indicating more people are hunting for jobs.

Yet unemployment fell by two-tenths of a percent. "I'm hearing from a lot of employers that that's their No. 1 issue, is finding good people," Madden said.

Bill Blazar, the president of the Minnesota Chamber of Commerce, said that for businesses, a skilled workforce is becoming more and more important as the labor market tightens. Firms around the state are more concerned about finding qualified workers than about any of the other things that worry them — such as taxes, the cost of health care and electricity prices.

"When they can't find qualified workers, that sends them over the edge," Blazar said. "Then those other warts on our business climate — the high taxes, the length of time that it takes to get a permit — all of that stuff becomes so much more pronounced."

Firms will start looking to relocate unless Minnesota can train or allow the immigration of a qualified workforce for the future, Blazar said.

"It certainly gives more urgency to all of our efforts to do a good job of training individuals to enter and be part of the workforce," he said.

In October, the biggest Minnesota job gains were in retail. Firms added 5,300 jobs at auto parts stores, food and beverage and even department stores, which have struggled since the recession. Some of the hiring may reflect merchants' hopes for a strong holiday shopping season, Hine said, but the hiring is broad-based enough that it's not just a holiday head count.

"Some of this strength is certainly reflecting growing consumer confidence and a willingness to spend," Hine said.

The state's monthly job report is an estimate that at times can deviate widely from more refined results the federal government releases several months later. That was clear in September when data released from the Quarterly Census of Employment and Wages, widely considered the gold standard for job numbers, showed that from March 2013 to March 2014, the state added less than half as many jobs as the monthly reports showed.

But despite its limitations, the monthly numbers provide the only fast approximation of the state job market.

According to the figures, health care added 3,500 jobs in October, manufacturing added 2,300 and construction added 900. Health care hiring has continued through the downturn and recovery. The rate of manufacturing job growth over the past 12 months has reached a postrecession high, and construction added jobs in a month when it's usually shedding workers.

Industries that shed jobs included leisure and hospitality, which lost 2,100 jobs on the month. Professional and business services lost 1,300, government shed 700 and financial activities shed 400.

Other indicators were also positive in October. The number of unemployed Minnesotans has dropped by 30,000 in the past 12 months. The number of people working part-time jobs because they can't get a full-time position has dropped by more than 30,000 over the same period, Hine said.

Among cities in the state, Mankato led the way with 2.7 percent job growth over the past 12 months. St. Cloud and the Twin Cities metro area both grew at 1.7 percent. Rochester's growth was more tepid — about 1 percent. Job growth in the Duluth-Superior metro area was flat.

Over the past 12 months, the state has added almost 50,000 jobs, with about a fifth each in manufacturing, professional and business services and private education and health care.

"Those aren't low-wage jobs," said Tom Stinson, an economist at the University of Minnesota. "I think it's good news for wages too."