Minnesota continued to post job growth last month though not at the robust levels seen earlier this year.
Minnesota added 4,200 jobs in September; jobless rate ticks up to 2%
Education and health service employers led the jump in hiring around the state last month.
October 20, 2022 at 8:26PM
The state added 4,200 jobs in September while the unemployment rate ticked up a tenth of a percentage point to 2%, the Minnesota Department of Employment and Economic Development said Thursday.
August also wasn't as dire as initially reported; the numbers for that month were revised to a gain of 1,200 jobs instead of a loss of 3,100 jobs.
Still, job growth appears to be slowing compared to the spring, when the state added more than 10,000 jobs in each of three consecutive months, and to July, when it added 17,100 jobs.
The moderation comes in a still very tight labor market and as the Federal Reserve has aggressively hiked interest rates to try to rein in inflation and cool the labor market.
DEED Commissioner Steve Grove noted that job numbers can bounce around from month to month and hailed Minnesota's 12th straight month of job growth. He added that he's not seeing much evidence of a tempering in employers' appetite to hire.
"When you've got four jobs open for every one person searching in the state, it's hard to say that there's been much slowing," he said. "We talk to employers everyday who are continuing to really struggle to find workers."
Minnesota had 192,000 job openings in August, down from 226,000 the month before, according to the U.S. Bureau of Labor Statistics. At the same time, state officials said the number of unemployed people in Minnesota is at its lowest level since the 1970s.
Amid the workforce shortage, Grove said some firms, particularly in manufacturing, are investing more in automation, realizing that they won't be able to hire 50 workers overnight. And many are holding onto the workers they do have even as demand may be slowing down in some sectors.
"If you have a worker in today's market, it's really hard to consider letting them go," he said.
The number of Minnesotans receiving unemployment insurance has remained relatively flat around the low levels of 2018 and 2019, state officials said.
The size of the state's labor pool still hasn't recovered to pre-pandemic levels, fueled by an acceleration in retirements. In September, the state's labor force ticked down one-tenth of a point to 68.1%. It was the third month in a row that metric has declined.
State officials pointed to other signs of a tight labor market — the number of people working part-time who would prefer to work full-time declined last month and the percentage of 16- to 19-year-olds working has risen to 53%.
Average hourly wages were up 5.7% over the year in September, higher than the 5.2% for the U.S. But neither are keeping up with high inflation, which rose 8.2% last month.
Minnesota has now recovered about 90% of the 417,6000 jobs it lost in the first months of the pandemic. Meanwhile, the U.S. has made a full jobs recovery.
Job gains last month were led by education and health services with 3,200, professional and business services with 1,600, leisure and hospitality with 1,400, and manufacturing with 1,100.
That was partially offset by the loss of 4,300 jobs in government, 900 in financial activities, and jobs in other services.
Nursing and residential care facilities saw the first month of job growth since the start of the pandemic. It was a small gain of 157 jobs, or 0.2%, but seemed to be a sign that pay increases are helping to recruit more workers. Wages in that sector have risen 11.7% over the year.
Other industries that have seen big wage increases over the year include professional and business services (up 9.5%), construction (up 8.5%), non-durable goods manufacturing (up 8.3%) and restaurants and bars (up 7.5%).
The unemployment rate for Black Minnesotans improved to 5.9%, down from 6.6% the month before. The white jobless rate also ticked to 2.2% while the Latino jobless rate rose to 3.7%. These figures are based on 12-month rolling averages.
The state unemployment rate has been ticking up the last two months after setting the record for the lowest ever in U.S. history.
But it's still near historic lows and among the lowest in the nation. And it's still quite a bit lower than the U.S. jobless rate of 3.5%.
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