Job growth has stalled in Minnesota

Job growth in Minnesota stalled at the start of 2019, data showed Thursday, as employers strained to deal with a labor force that has little prospect of getting larger anytime soon.

The latest hiring data from the Minnesota Department of Employment and Economic Development (DEED) showed hiring turned upward again in March, but so did the unemployment rate.

Meanwhile, wages fell, contrary to what typically happens in a time of peak employment.

Monthly data is always volatile, but the longer-term numbers continued to show that job growth is at a trickle, and Minnesota has little fuel to get it going again.

"We are at very tight conditions and the [low] availability level of workers is keeping a lid on our ability to grow jobs at the rates we have seen in the past," said Steve Hine, labor market analyst at DEED.

Demographics are working against employers, with baby boomers retiring in droves, fewer people coming out of school now than a decade ago and immigration plunging.

Meanwhile, Minnesota's labor force participation, at 69.8%, is already one of the highest in the country.

Unemployment benefit claims are near record lows in the state, and data coming next week will likely to show that job vacancies are at another record high.

"We can't count a job unless there is a warm body to fill it," Hine said.

The state added 1,300 jobs in March, getting back to the positive side of the ledger after a drop of 7,800 jobs in February that was shaped by a plunge in construction activity during a month of record-setting snow.

But for the first three months of the year, Minnesota is still in the red, down 2,700 jobs. During the 12 months ended March 31, the state added 7,600 jobs. But for a state with nearly 3 million workers, that 12-month figure translates to a growth rate of 0.3%, well below the nation's job growth rate of 1.7% in the period.

For four months last year, Minnesota's unemployment rate was 2.8%, the lowest level since 1999. But as hiring slowed, the overall labor force has contracted marginally and the unemployment rate has ticked upward slowly, reaching 3.2% in March. The U.S. unemployment rate was 3.8%. Both figures are adjusted for seasonal variations.

During March, six of the 11 employment sectors measured by DEED lost workers. Of the five that hired workers, construction led the way by filling 2,800 jobs.

Evan Ramstad • 612-673-4241