Minnesota’s job market is frozen, showing even employers have economic worries

This past summer — about six months before Minnetonka-based Digital River folded — the e-commerce company laid off Mike Penterman, who had spent more than 20 years working there.

At 53 years old, the Carver resident and primary breadwinner for his household was jobless. And he still is, seven months later.

“All the tips and tricks you see out there, I’ve tried them all,” said Penterman, who has been using a mix of consulting work and unemployment benefits to cover full-cost health insurance through COBRA. “People don’t get back to you even with a ‘sorry, not interested.’ You’re kind of left in this void of, ‘I thought the interview went well, and then I didn’t hear anything.’”

Despite months of reported job growth both nationally and in Minnesota, economic policy experts describe the job market as stuck. The unemployment and hiring rates typically take opposite paths, like when unemployment was at 15% nationwide during the height of the pandemic and hiring was at 3%.

Minnesota’s current unemployment rate is 3%. The state’s most recent hiring rate from December: 3.3%.

“It’s a bit of a ghost recession,” said Kathryn Edwards, an independent economic policy consultant. “Everybody thought it would come, and there’s certainly been pain in the economy, but not a broader economic downturn.”

It’s not just consumers uncertain about the U.S. economy, which faces tariffs, federal layoffs, stubborn inflation and a falling stock market. Companies are tightening their expenditures, and that’s “crimping hiring plans in 2025,” Glassdoor Lead Economist Daniel Zhao said in a statement.

“As the economy slows down, businesses have been hesitant to commit to expanding their workforces,” the statement continued.

The percentage of CEOs in a Chief Executive magazine poll who expected the business climate to improve in 2025 dropped 10% since the beginning of the year. Small-business owners, too, reported near record-high uncertainty in the latest National Federation of Independent Business survey. That means less hiring, which in turn “means fewer opportunities for people out of work to get back on the career ladder” and “fewer opportunities for workers to advance up the career ladder by finding a better job on the open market,” per Zhao’s statement.

Hiring jumped after the onset of the pandemic, overtaking the unemployment rate during the Great Resignation thanks to white-collar, remote-friendly jobs like software development. But it has fallen since — except in industries that require in-person work, such as hospitality and construction. That contributes to the discrepancy between the numbers and real life.

“It seems to be a stable labor market, a healthy labor market,” said Indeed economist Cory Stahle. “But at the end of the day, when we dive into the data, and we look at the people who are behind the numbers, not everybody’s having that experience.”

Penterman has landed just one interview after applying for an estimated 100 jobs. He’s now trying to network on LinkedIn with employees at companies where he would like to work. Of those 90 invitations, only about a quarter became connections.

Of those, just one agreed to a Zoom call: She, too, had recently lost her job.