Minnesota’s 1.8% unemployment rate could be lowest in the country
MINNESOTA (FOX 9) – Employers hoping for an influx of summer workers in Minnesota have yet to see them, according to new data reporting that for the third month in a row Minnesota has the lowest unemployment rate ever recorded – falling to 1.8% in June.
“It’s a great time to be a job-seeker and a hard time to be a business owner. There’s a bit of head-scratching from everybody looking at these numbers,” said Steve Grove, commissioner with the Minnesota Department of Employment and Economic Development (DEED), Thursday.
Last month the jobless rate dipped to 2%, down from the previous record of 2.2% in April, according to DEED data. Minnesota’s recordkeeping goes back to 1976, and the lowest pre-pandemic unemployment rate was 2.5% in early 1999.
Job growth slows
According to state officials, the unemployment rate declines can be attributed to people moving from unemployment to the workforce again, as the labor force participation rate increased one tenth of a percent to 68.5%.
However, job growth is slowing.
On a seasonally adjusted basis Minnesota’s job growth was flat in June, with the state only gaining 100 jobs throughout the month. In 2022, Minnesota has added 91,421 total payroll jobs, up 3.2%. Minnesota still has 72,000 fewer people in the labor force than before the COVID-19 pandemic began.
“I’m not hearing a lot of folks cooling off on hiring people, it’s just been harder. Workers aren’t settling for part-time jobs, they’re seeking out and finding full-time jobs, and employers are finding ways to create them,” Grove said. “This is an economy that is really a worker-friendly economy in terms of opportunity… Boy is it a good time to be a job-seeker right now.”
Wages hampered by inflation
For those employed in the private sector, Minnesota’s wages rose 5.2% in June year-over-year, but were wiped out by 9.1% inflation.
Unemployment rates are also not consistent across all demographics.
According to the data, Black and Hispanic Minnesotans have higher labor force participation rates, at 68.9% and 79.7%, than White Minnesotans, at 68.4%.
In all, Minnesota employers are dealing with one of the country’s tightest labor markets, 40-year-high inflation and rising interest rates that are stoking fears of a recession.
“One of the things we’re seeing and encouraging is businesses to increase automation,” Grove said, noting state and federal programs to help businesses increase efficiency. “We need more automation in our economy to increase productivity.”
DEED’s Summer of Jobs campaign will also highlight job market opportunities, and aim to help employers find workers in labor pools that might have previously been overlooked, according to a press release.
“If our economy can’t figure out how to hire and maintain our workforce effectively it will be at our own economic peril,” said Grove Thursday.