(FOX 9) - Minnesota employers ramped up their onboarding in July after hiring was basically flat a year earlier, according to state data released Thursday.
The yo-yo of labor market data is just one mixed signal in Minnesota's economy, which is dealing with the effects of inflation, rising interest rates, and labor shortages along with the rest of the U.S. Even though the economy has softened, employers are still looking for workers, said Steve Grove, the state's economic development commissioner.
"Labor has been so tight for so long in our state and so prized that I do think companies are reticent to sort of let folks go if things change soon and things get better, because they might not have the workers they need in the future," Grove told reporters.
Minnesota's unemployment rate held steady at a record-low 1.8% in July, the lowest of any state since recordkeeping started in 1976.
Employers added 19,100 jobs in July on a seasonally adjusted basis, state data show. A month earlier, employers added just 1,000 jobs.
But neither of those data points present a full picture, said Oriane Casale, assistant director of the Minnesota Department of Employment and Economic Development's labor market information office.
That's partially because in a tight labor market, employers simply have better luck finding workers in some months than others. And the COVID-19 pandemic labor market had so many ups and downs that year-over-year comparisons become tricky, Casale said.
"Because we saw that huge downward swing in jobs in 2020 -- which we’ve never seen such a dramatic drop before -- and then the huge upswing, and then the lumpiness after that. It’s presenting some challenges in seasonally adjusting these numbers going forward," Casale said.
The tight labor market is due in part to people leaving the labor force.
In July, 4,000 people left the labor force, the first decrease all year. Minnesota's workforce is more than 75,000 people smaller than it had been before the pandemic, state data indicate.
"We face some real demographic challenges," Grove said. "We have an aging population, more than the rest of the country. We do face racial wealth gaps that are pretty stark and that we think are one of the biggest impediments to us growing."
Inflation continues to eat up Minnesota workers' wage gains, as it has for several months. U.S. consumer prices increased 8.5% in July, compared with 5.6% average wage gains in Minnesota.