Minnesota hit a record number of workers in October, with more than 3 million on the job last month.
While unemployment ticked up and the labor force shrank slightly last month, Minnesota continued to outpace national job growth, which has begun to cool after months of resilience.
After declining at the height of the COVID-19 pandemic, the number of Minnesota jobs had hovered around 2.5 million or higher since August 2022. The record-setting October number indicates strong economic growth, said Angelina Nguyễn, labor market information office director at the state Department of Employment and Economic Development (DEED).
"It means that our economy has recovered fully from the pandemic and continues to grow," she said.
Minnesota added 7,000 jobs between September and October, marking the state's third-consecutive month of job growth, according to DEED. The education and health services sector made up nearly half the monthly gain, with professional and business services; leisure and hospitality; and government and construction following.
The state unemployment rate rose to 3.2%, up from 3.1% in September but still lower than the 3.9% national rate. The labor force dropped by 84 people — the first decline in eight months — and the participation rate held steady at 68.5% for the fourth-consecutive month.
"We are really happy to see another month of job growth," said DEED Deputy Commissioner Kevin McKinnon. "There are many opportunities, obviously, for job seekers right now in Minnesota. We continue to work hard to make sure people know about all the job openings throughout the state and across industries."
Payroll jobs in Minnesota rose 1.4% year-over-year, or 42,266 jobs, mostly in the private sector. Most of the "supersectors" that DEED measures showed annual growth, although four — information, manufacturing, financial activities and professional and business services — posted losses. Only the information sector — which includes the publishing, broadcasting, telecommunications, motion picture and sound recording industries — also declined nationally.
Private-sector wages have also risen in Minnesota, with a 3.3% bump since October 2022 bringing the average hourly wage to $36.51, compared to about $34 nationally.
"Overall, wage growth is on par with inflation, and that is a good sign," Nguyễn said.
Inflation in the Twin Cities and across the Midwest has been lower than the country as a whole, though the national picture is changing rapidly.
The U.S. Bureau of Labor Statistics reported Tuesday the consumer price index (CPI) rose 3.2% year-over-year in October, down from 3.7% in September. Economists and market-watchers heralded the news as a sign the Fed's interest rate hikes are having the desired effect, and instead of implementing another increase above the current 5.25% to 5.5%, the central bank might begin to notch rates back down.
Interest rate hikes are intended to drive inflation down to 2% by pumping the brakes on the economy, which in turn can soften the labor market and spur unemployment. Fed officials are aiming for a soft landing, in which the economy slows without throwing the country into a recession.
"To be sure, it is a good thing that the easing in supply-demand imbalances in the labor market and the disinflation we are seeing thus far have taken place with only a modest increase in the unemployment rate," Fed Governor Lisa Cook said at the San Francisco Fed on Thursday. "I believe that a soft landing is possible with continued disinflation and a strong labor market, but it is not assured."
