Minnesota's Unemployment Rate at 4.5% in January

St. Paul – Minnesota’s seasonally adjusted unemployment rate dropped to 4.5% in January, down from a revised 4.7% in December, according to numbers released today by the Minnesota Department of Employment and Economic Development (DEED).

Once again, the decline was due to people leaving the labor force from both employment and unemployment. The number of unemployed fell 7,652 and the number of employed fell 14,851 for a total decline of 22,503 in Minnesota’s labor force on a seasonally adjusted basis. The national unemployment rate fell to 6.3% in January from 6.7% in December.

The deepest impacts of the pandemic are felt by Minnesotans who identify as Black, Indigenous, and People of Color (BIPOC). Based on 12-month moving averages, the unemployment rate for Black Minnesotans was 9.5% in January, up from 9.0% in December and up from 4.9% one year ago. The Latinx unemployment rate was 7.3% in January, the same as December and up from 4.9% one year ago. White Minnesotans were at 5.8% in January, 5.6% in December and 3.0% a year ago.

Starting this month, our data has reverted to a 12-month moving average rather than the 6-month moving averages previously used. This means the higher months of unemployment rates from earlier in the pandemic are included in the averages.

In January, Minnesota gained 51,800 jobs, that is up 1.9%, on a seasonally adjusted basis, replacing all but 1,000 of the jobs lost in December (revised). January estimates are from the same week that bars and restaurants were able to again seat customers indoors, starting January 11. The private sector gained 48,900 jobs in January, up 2.1%, more than making up for the 47,100 lost in December. Government gained 2,900 jobs, up 0.7%.

“The recovery of over 51,000 jobs in January is a promising sign for Minnesota,” said DEED Commissioner Steve Grove. “We have a lot of work ahead to grow our economy, and as this report shows, we must focus on those hit hardest by the pandemic – people of color, people with disabilities, lower wage workers, and small businesses.”

Of the 416,300 jobs lost from February through April 2020, the state has gained back 191,400 jobs. Minnesotans can connect with DEED to learn about how we can help them find career and training opportunities at http://www.CareerForceMN.com/GoodJobsNow.

Every March, we also release the revised employment numbers for the past several years. These revisions always result in shifts for some months of data for both the unemployment rate and the labor force participation rate. Anytime data has been revised from previous reports, you will see that marked by (revised).

The revisions show the loss of 10,000 jobs more than initially reported during the pandemic. The revisions happen because of new population controls, new seasonal adjustment factors, and more comprehensive employment counts becoming available.

The labor force participation rate fell from 68.4% in December (revised) to 67.9% in January. Nationally, the labor force participation rate dropped one tenth of one percentage point to 61.4%.

Monthly job gains in January were widespread with 8 supersectors gaining jobs, 2 supersectors losing jobs and Mining and Logging holding steady.

Gains were largest in Leisure & Hospitality, up 35,500 jobs or 22.1% followed by Education & Health Service up 6,700 or 1.3%, Other Services, up 4,100 or 4.2%, Government up 2,900 or 0.7%, Manufacturing up 1,400 or 0.5%, Professional & Business Services up 900 or 0.3% and Information up 300 or 0.7%. Losses were in Financial Activities, down 400 or 0.2% and Construction, down 100 or 0.1%. The U.S. gained 166,000 jobs, up 0.1% over the month in January on a seasonally adjusted basis.

Over the year in January, Minnesota shed 229,968 payroll jobs, down 7.8%. The private sector shed 205,547 jobs, down 8.2% in January. U.S. over-the-year job loss stood at 6.1% with the private sector down 6.2% in January. Both U.S. total nonfarm and private sector employment were unchanged over-the-year from December.

All supersectors continued to show over-the-year job loss in MN and nationally. In Minnesota, over-the-year job losses were still greatest in Leisure & Hospitality, down 31.8% or 83,383 jobs. Other supersectors with a high share of job losses were Information, down 12.4% or 5,703 jobs, Other Services, down 11.3% or 12,853 jobs and Professional & Business Services, down 7.3% or 27,535 jobs over the year.

After revisions, two supersectors in Minnesota showed strength over the year compared to the U.S .: Logging & Mining job loss in MN remains below U.S. job loss, down 6.8% in Minnesota compared to 12.2% nationally; and employment in Education & Health Services is down 4.4% in Minnesota compared to 5.2% nationally. In Minnesota, strength is in Educational Services as well as Nursing and Residential Care Facilities compared to the U.S.

Among industry subsectors, Food manufacturing continues to show strength in the state after benchmarking, up 3.5% in Minnesota and down 1.0% nationwide, bringing employment change in non-durable goods to just -2.2% in Minnesota compared to -3.0% nationwide. Employment services was revised downward throughout 2020 in Minnesota resulting in an over-the-year decline of 18.3% in Minnesota compared to 7.1% nationwide in January.

Employment fell in January over the year in all Minnesota Metropolitan Statistical Areas.

Minnesota and U.S. Employment and Unemployment – January 2021

Seasonally Adjusted Not Seasonally Adjusted

Unemployment Rate January 2021 December 2020 January 2021 January 2020

Minnesota 4.5% 4.7% 5.1% 3.8%

U.S. 6.3% 6.7% 6.8% 4.0%

Employment January 2021 December 2020 January '20-January '21 Level Change January '20-January '21 % Change

Minnesota 2,771,400 2,719,600 -229,968 -7.8%

U.S. 142,669,000 142,503,000 -9,107,000 -6.1%

Minnesota and U.S. Over the Year (OTY) Employment Change, Not Seasonally Adjusted: January 2020-January 2021

Industry Supersector OTY Job Change OTY Growth Rate (%) U.S. OTY Growth Rate (%)

Total -229,968 -7.8 -6.1

Private -205,547 -8.2 -6.2

Logging & Mining -424 -6.8 -12.2

Construction -4,829 -4.3 -2.5

Manufacturing -15,557 -4.9 -4.4

Trade, Transport. & Utilities -29,147 -5.5 -2.8

Information -5,703 -12.4 -7.8

Financial Activities -1,781 -0.9 -0.7

Prof. & Business Services -27,535 -7.3 -3.6

Ed. & Health Services -24,335 -4.4 -5.2

Leisure & Hospitality -83,383 -31.8 -22.0

Other Services -12,853 -11.3 -7.5

Government -24,421 -5.7 -5.4

Metropolitan Statistical Area (MSA) Over the Year (OTY) Employment Change, Not Seasonally Adjusted: January 2020-January 2021

Metropolitan Statistical Area OTY Employment Change OTY Employment Change (%)

Minneapolis-St. Paul MN-WI MSA -177,999 -8.8

Duluth-Superior MN-WI MSA -9,645 -7.2

Rochester MSA -7,439 -6.0

St. Cloud MSA -7,097 -6.5

Mankato MSA -4,074 -7.0

Visit the DEED website to see DEED’s alternative measures of unemployment. You can also find the monthly jobs numbers and unemployment data on DEED’s website. See link at the bottom of this webpage for an analysis of the annual revisions. You can see resources to help Minnesotans prepare for and find employment now at CareerForceMN.com/GoodJobsNow.

DEED is the state's principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and its services, visit the DEED website or follow us on Twitter.