Minnesota construction benefits from warm December, but government jobs languish

Minnesota's snowless and milder-than-usual temperatures in December were good and bad for jobs.

It was one of the state's warmest Decembers on record and that meant more cranes and bulldozers than normal were at work last month, but also fewer snow plows on the road.

Those two extremes showed up in the latest jobs data the Minnesota Department of Employment and Economic Development (DEED) released Thursday.

Construction added 1,200 jobs in the state in December, while government — with local government being the main culprit — lost 1,700 jobs.

"All the activities that our local government is responsible for in terms of snow removal, plow trucks clearing roads and de-icing — those jobs were affected because of the warmer weather," said Angelina Nguyễn, DEED's labor market information director.

Along with ups and downs in other industries, it all added up to more muted job growth in the last month of the year compared to more robust job creation during the fall.

The state gained 800 jobs in December, the sixth consecutive month of growth. By comparison, Minnesota added 5,800 jobs in November, a number revised down from the initial estimate of 9,500 jobs.

Meanwhile, the state unemployment rate dropped two-tenths of a percentage point to 2.9%. The U.S. jobless rate is 3.7%.

Nguyễn noted that construction jobs boomed all of last year in Minnesota because of federal and state investments in public construction projects. In 2023, the state gained nearly 10,800 construction jobs, a 9% increase and roughly triple the national growth rate.

That was the best performance of any industry in the state last year. Trade, transportation and utilities also experienced robust growth adding more than 14,000 jobs.

Meanwhile, financial activities lost more than 8,000 jobs in 2023 and professional and business services declined by more than 5,000 jobs.

In total, Minnesota gained jobs in all but two months last year, adding up to nearly 51,000 more jobs in 2023, a 1.7% increase. That was slightly lower than the national job growth rate of 1.9%.

"Overall 2023 has been a good year for job growth," Nguyễn said. "A little slower than the national rate, but I'm not concerned about that. It is still a very competitive rate. And when Minnesota is ranked, when we look at all 50 states, our job growth is right there in the middle. We ranked 24th in the nation for job growth."

At the same time, the state continues to have more jobs openings than available workers.

Minnesota had 209,000 job openings in November, according to new data also released Thursday by the Bureau of Labor Statistics. That was up from 192,000 openings the month before, and 193,000 openings in November 2022.

"Clearly our tight labor market is constraining job growth in the state," said DEED's Deputy Commissioner Kevin McKinnon. "There is room for more job growth if enough workers can be found."

He noted that Minnesota has one of the highest labor force participation rates in the country. "So there are fewer people on the sidelines here than in most other states," he said.

However, the size of Minnesota's labor force dropped in December, the third straight month it has done so. It declined by 6,590 people, leading to a slightly lower participation rate of 68.1%. The U.S. labor participation rate is 62.5%.