Minnesota's labor market not as tight as initially thought; 14,100 jobs added in January

At a job fair earlier this week in Maplewood, a couple dozen employers set up tables looking to fill several open positions and enticed applicants with candy and hiring bonuses.

"I do feel like it's getting a little bit better," said Kristi Holmstrom, human resources coordinator for the DoubleTree by Hilton in Roseville, of finding workers. "It was pretty hard for awhile there. But I feel like people are slowly getting back into the job market. We're getting a lot better applicants."

Data the Minnesota Department of Employment and Economic Development (DEED) released Thursday reflected that, showing the state added 14,100 jobs in January after taking a pause with job growth at the end of 2022.

"This the biggest month-to-month gain since February of '22," said interim DEED commissioner Kevin McKinnon. "This means our labor market is still very tight but not as tight as originally estimated."

In other words, the labor shortage isn't so bad that it's constraining employers from finding at least some workers to fill positions. But hiring is still a challenge.

Annual revisions to the jobs data also showed Minnesota's labor market last year was not quite as constricted — and did not break as many records — as initially thought.

The state unemployment rate, for example, moved up to 2.9% in December, four-tenths of a percentage point higher than originally reported. It then held steady in January.

Angelina Nguyen, DEED's labor market information director, noted Minnesota's jobless rate was 3.4% in January 2020, a half percentage point higher than where it is now.

That indicates Minnesota is "still looking at a tighter labor market than pre- pandemic," she said.

The most current reading is also still lower than the U.S. unemployment rate of 3.4%, the lowest it's been in more than 50 years.

As for the 1.8% jobless rate Minnesota initially logged in June and July of last year — which made headlines for being the lowest a U.S. state has ever registered — the new updates erased that number from the record books.

Instead, the revised data put Minnesota's lowest unemployment rate last year at 2.3% in April, which was still a record low for the state.

As it does every year around this time, the U.S. Bureau of Labor Statistics edits its jobs and employment data for the last several years, taking variables into account such as new seasonal-adjustment factors and more comprehensive employment counts.

The updated numbers also led to a two-tenths of a percentage point increase in the state's labor force participation rate to 68.1% in December. It stayed the same in January.

The state still has about 47,000 fewer workers in the labor force compared to before the pandemic, Nguyen said. Before the revisions, that figure was closer to 90,000.

In January, professional and business services led the state's job gains with 6,600 jobs. Construction followed with 2,200 jobs, government with 2,100 jobs and education and health services with 2,000 jobs.

In the last year, Minnesota has seen 2.4% job growth compared to 3.6% for the U.S.

The state has now regained about 95% of the jobs lost in the first months of the pandemic while the U.S. has made a full recovery.

At the job fair, Holmstrom said she's seen more workers in their late 20s and early 30s who tried out other kinds of jobs earlier on in the pandemic but are now returning to retail and restaurant-type work. She also observed more people looking for second jobs because of high inflation.

One of those checking out the job openings was Mark Nygaard of Mounds View. He already has two jobs but was curious to see if he could find one with better pay and more consistency than his part-time gigs driving a truck.

"I'm just looking to see what's out there," he said.