Minnesota’s unemployment rate dropped substantially to 7.3 percent in September — a decline that masked overall job losses and will cost thousands of the state’s jobless weeks of benefits.

The figure reported Thursday by the state Department of Employment and Economic Development is well below Minnesota’s 8 percent seasonally adjusted unemployment rate for August and the nation’s 9.8 percent rate for September.

“Things appear to be getting a little better but we’re careful not to be overly optimistic,” said the agency’s commissioner, Dan McElroy. “We’re still in a time of too much unemployment.”

Some of the drop is attributed to the nearly 19,000 people who stopped looking for work, either because they were discouraged or they went back to school as demonstrated by climbing college enrollments. Officials said the net reduction in the state labor force was 4,000 because 15,000 more people showed up in statistics as employed.

Because Minnesota’s rolling three-month unemployment average has slipped beneath 8 percent, some out-of-work residents won’t receive some federal unemployment benefits they otherwise would have.

McElroy said the maximum available benefits will shrink from 79 weeks to 72 weeks, a wall some in Minnesota will hit in mid-November. The number of weeks people can collect checks depends on how much they worked prior to getting laid off.

McElroy said up to 7,000 of the 170,000 people receiving unemployment benefits will see a reduction.

“The best solution for us is to help them find work,” McElroy said.

That might be easier said than done in a state that has seen its overall labor force decline by 124,400 jobs in 12 months. Employers cut 7,900 lost jobs in September.

The largest cuts were in government, which lost 5,600 jobs. Researchers said the reduction resulted from fewer school districts hiring at the start of the academic year. The leisure and hospitality sector was down 4,900 jobs.

Among the five sectors that saw gains, the trade, transportation and utilities sector added the most, with 2,600 new jobs.

Minnesota would have to see its three-month average drop below 6.5 percent before more weeks are cut from the limit.