Minnesota's economy grew slightly faster than the country's overall to start 2023.
Minnesota's economy gained speed at the start of 2023
The state's GDP growth was slightly higher than the nation's overall in the first quarter. It also grew at a faster rate than last year's pace.
June 30, 2023 at 3:29PM
Adjusted for inflation, the state's gross domestic product rose 2.2% on an annualized basis over the first three months of the year, according to the U.S. Bureau of Economic Analysis.
The nation's first quarter GDP growth, which was revised upwards this week, came in at 2%.
GDP measures the total value of economic output. In the first quarter, Minnesota's goods and services adjusted for inflation amounted to $354 billion per year, the U.S. Commerce Department said Friday.
"It's a pretty good number for Minnesota, at least compared to the last two quarters of data," said Joe Mahon, a regional outreach director at the Federal Reserve Bank of Minneapolis. "It's not all sunshine, though. There are some pockets of weakness."
While the rate of growth has fluctuated and inflation has reduced its impact, in real dollars the state has not seen its GDP shrink since the pandemic. In 2022, Minnesota's GDP grew by 1.2% on an inflation-adjusted basis.
Agriculture, retail and construction were the largest contributors to growth in the first quarter. A decline in manufacturing output and within the finance and insurance industries offset those gains.
Mahon said that given the sector's importance to Minnesota's economy, the manufacturing decline is "concerning, though not too terribly surprising given what we know about the broader economy."
"For the question of expansion or recession — what we expect to see in a recession is contraction across the entire economy," he said. "We're not seeing weakness universally across the economy."
Minnesota incomes grew 6.8% this winter after rising just 1.5% at the end of last year. Take-home pay was up 4.7%.
Other key economic data released Friday showed national consumer spending grew just slightly in May, and one measure of inflation showed welcome improvement.
That's the Personal Consumption Expenditures price index minus food and energy, watched closely by the interest-rate keepers at the Federal Reserve. It grew 4.6% annually, roughly on par with the rate seen in previous months.
Around the region, the Dakotas saw double-digit GDP growth in the first quarter while Iowa's economic output increased more than 5%.
Wisconsin's economy grew 1.2% in the first quarter.
The party supply company told employees on Friday that it’s going out of business.
