Minnesota's unemployment rate falls to 2.5%, lowest on record
ST. PAUL, Minn. (FOX 9) - Minnesota’s seasonally adjusted unemployment rate matched an all-time best 2.5 percent in March, as the strong labor market continues to contrast with high inflation.
March's 2.5 percent mark ties January and February 1999 for the lowest jobless rate on record. The state’s data go back to 1976. Minnesota gained 11,500 jobs for the month and has added 68,574 jobs over the past year, state Department of Employment and Economic Development data indicate.
Labor force participation rate, a measure of people employed or looking for work, ticked up to 68.1 percent in March, the best it’s been since November 2020. It’s below the 70.8 percent seen just before the COVID-19 pandemic, but better than the national average.
"We have a labor force shortage, but we have a lot of workers hiding in plain sight," Economic Development Commissioner Steve Grove told reporters.
Women are staying out of the labor force longer than men, state data indicate. Both genders had experienced a similar decline in labor force participate last fall, but their paths have diverged since then, with more men returning to the workforce.
Hispanic and Black workers are driving the growth in labor force participation rate, while the participation among white workers has fallen slightly over the past year, according to the state's data.
The strong jobs market is leading to wage gains, but the increasing costs of goods and services is outstripping pay growth.
The average hourly wage increase for Minnesota private-sector workers was 4.9 percent over the year, compared with 8.2 percent inflation in the Twin Cities in March.
Inflation outpaced wage gains in 2021 for the second time in the past decade. It is on pace to happen again in 2022, with the gap growing wider.
Some high-demand, low-wage jobs are seeing wage gains that are better than inflation: nursing and residential care wages are up 13.8 percent over the year, while food production is up 10.3 percent.
Minnesota's private sector has now regained 310,900 jobs since spring 2020, or 80 percent of the jobs lost at the start of the pandemic.
Over the past year, nine of the state's 11 supersectors added jobs. Leisure and hospitality, which was battered at the start of the pandemic, led the way with 36,198 new jobs. Only the financial activities and education supersectors lost jobs.
Some workers -- especially those who are Black, over age 55, or have low levels of educational attainment -- are struggling to find stable employment despite consistently looking for jobs, state economic analysts say. The Black unemployment rate is 7.1 percent, while the Hispanic jobless rate is 5.1 percent and the rate among whites is 3 percent.