JOBS AND WAGE GROWTH CONTINUE IN MINNESOTA

Minnesota’s unemployment rate in October 2021 is back to where it was immediately before the global pandemic was declared in March 2020 at 3.5% (revised), down two-tenths of a percentage point from September, according to numbers released today by the Minnesota Department of Employment and Economic Development (DEED).

The decline in Minnesota’s unemployment rate in October was primarily due to people moving from unemployment to employment, although the size of the labor force shrank slightly by nearly 1,000 people. Nationally, the unemployment rate fell two-tenths of a percentage point to 4.6%.

Minnesota’s labor force participation remains down from where we were immediately before the pandemic. The state’s rate remained unchanged from September to October 2021 at 67.8%, down from 70.2% in March 2020. Minnesota’s labor force is now more than 84,000 workers smaller than it was just prior to the pandemic. Still, Minnesota’s labor force participation rate is well above the national rate of 61.6% in October.

Wages and hours have increased since before the pandemic both in Minnesota and nationally. In Minnesota, average hourly earnings for all private sector workers rose 41 cents to $33.43 in October over the month. Over the year, average hourly earnings rose $1.99, up 6.3% and since September 2019 they are up 8.7%. Nationally, private sector wages rose 5.1% over the year and 9.8% over two years. Inflation has offset some of those wage gains. The national Consumer Price Index (CPI) of inflation rose 0.8% over the month, 6.2% over the year and 7.5% over two years.

At 34.5 hours per week, October’s average work week was up one-tenth of an hour from September but down 0.3% over the year and up 2.7% over 2 years in Minnesota. Nationally, hours rose 0.6% over the month, fell 0.3% over the year and rose 1.8% over 2 years. The number of Minnesotans working involuntary part time, meaning they want a fulltime job but are working part time because they can’t find a fulltime job, fell again in October by 2,600 people on a 12-month moving average basis. At 36,200 people it is now the lowest on record during an October, with records dating back to 2001.

Job growth continues, Minnesota gained 9,900 jobs, up 0.3% from September to October on a seasonally adjusted basis. The private sector gained 11,500 jobs, up 0.5%. The U.S. gained 531,000 jobs, up 0.4% in October, with the private sector adding 604,000 jobs, up 0.5%. Minnesota lost 416,300 jobs from February through April 2020 and has since gained 295,800 jobs, or 71% of the jobs lost on a seasonally adjusted basis. The private sector has regained 74% of the jobs lost.

“It’s good to see another month of job growth in Minnesota, despite a very tight labor market,” said DEED Commissioner Steve Grove. “At DEED, we continue to work with unemployed Minnesotans, helping them to find work that meets their families’ needs. Employers are paying higher wages, out-pacing inflation, which presents lots of great opportunities for job seekers.”

Many Minnesotans continue to be out of work, but the employment impact of the pandemic on workers has been difficult to measure. The pandemic caused some people to drop out of the workforce, lowering labor force participation, which resulted in an unemployment rate below what would be expected given job losses. The table below accounts for this by showing an adjusted unemployment rate, based on 12-month moving averages, that includes both Minnesotans who are looking for work now and who would have been expected to be working or looking for work if it wasn’t for the impact of the pandemic.

Over the month, eight supersectors gained jobs, two lost jobs and Mining & Logging remained unchanged on a seasonally adjusted basis in October.  Gains were in Professional & Business Services up 3,200 jobs, Manufacturing up 3,000 jobs, Leisure & Hospitality, up 2,700 jobs, Educational & Health Service up 1,000, Trade, Transportation & Utilities and Financial Activities each added 500 jobs, Construction up 400 and Other Services up 300. Losses were in Information down 100 jobs or 0.2% and Government down 1,600 jobs or 0.4%.  In Government, Local Government lost all 1,600 jobs while Federal and State Government both held steady from September.

Over the year, Minnesota gained 94,455 payroll jobs, up 3.4%. The private sector gained 93,480 jobs, up 3.9% over the year. These gains put total nonfarm employment 108,566 jobs short of October 2019 employment and the private sector 91,595 jobs short of two years ago. Information and Financial Activities continued to show over the year losses, down 1,282 (3.1%) and 2,292 (1.2%) respectively. Four supersectors in Minnesota now show strength over the year compared to the U.S.: Leisure & Hospitality, Construction, Professional & Business Services and Manufacturing.

Employment rose over the year in all Minnesota Metropolitan Statistical Areas.

Minnesota and U.S. Employment and Unemployment – October 2021

Visit the DEED website to see DEED’s alternative measures of unemployment. You can also find the monthly jobs numbers and unemployment data on DEED’s website. You can see resources to help Minnesotans prepare for and find employment now at CareerForceMN.com/GoodJobsNow.