Minnesota Job Growth Pauses in December

St. Paul - Minnesota’s private sector employers continued adding jobs in December, even as the state lost jobs overall, ending a 14-month streak of job growth that saw Minnesota employment outpace the national average, according to numbers released today by the Minnesota Department of Employment and Economic Development (DEED). Overall, Minnesota employment was down 0.2% from November, following an increase of 6,500 jobs that month.

While the private sector gained 900 jobs in December, it was losses in Government jobs (down 6,100) that drove the jobs decrease. Those losses were entirely in local government.

The U.S. gained 223,000 jobs in December, up 0.1% from the previous month, with the private sector adding 220,000 jobs, up 0.2% on a seasonally adjusted basis. Comparing Minnesota to U.S. job growth, Minnesota is up 3.2% over the year (OTY) with the private sector up 3.6%. U.S. employment grew 2.9% OTY with the private sector up 3.2%.

Minnesota’s unemployment rate ticked up two-tenths of a point to 2.5% in December 2022, but remains historically low. The labor force participation rate remained steady at 67.9% with 3,367 people entering the labor force. Nationally, the unemployment rate inched down one-tenth of a point to 3.5% and the labor force participation rate went up one-tenth of a point to 62.3%.

“Minnesota’s job growth took a holiday break in December, but the private sector grew and indicators point to a strong underlying economy,” said DEED Commissioner Steve Grove. “The Governor and Lieutenant Governor’s economic budget proposal they’ll announce today includes a bold set of strategic priorities that will bring more jobs, workers, and opportunity to our state."

Minnesota’s unemployment rate ticked down for Hispanic workers to 3.8%, continued a 6-month decline for Black workers to 3.9%, and ticked up for white workers to 2.3% in Minnesota in December, based on 12-month moving averages.

Inflation continues to outpace wage growth. In Minnesota, average hourly wages for all private sector workers rose 32 cents to $35.57 in December over the month. Average hourly earnings rose $1.27 OTY, up 3.7%. Over two years, average hourly earnings increased $3.28 or 10.2%. Nationally, private sector wages rose 11 cents (0.3%) over the month to $32.73. They rose 4.6% OTY and 9.8% over two years. The Consumer Price Index for all urban consumers, a common measure of inflation, rose 6.5% OTY and 13.9% over two years.

Over the month in Minnesota, these are the noteworthy supersectors that gained or lost jobs on a seasonally adjusted basis:

• Gains were in Trade, Transportation & Utilities, up 2,400 jobs (0.5%); Financial Activities, up 1,400 jobs (0.7%); Education & Health Services up 4,000 (0.7%); and Leisure & Hospitality up 4,300 jobs (1.6%).

• Losses were in Construction, down 2,600 jobs (2%); Manufacturing, down 1,100 jobs (0.3%); Professional & Business Services, down 6,200 jobs (1.6%); and Government, down 6,100 jobs (1.5%) over the month.

Over the year Minnesota gained 91,936 payroll jobs, up 3.2%. The private sector gained 87,587 jobs, up 3.6% OTY. All supersectors posted positive OTY employment growth with the exception of Construction and Other Services.

• Leisure & Hospitality continued to post the highest OTY growth of all the supersectors, up 10% with the addition of 23,084 jobs. This growth was driven by Arts, Entertainment & Recreation, up 30.4% OTY while Accommodations & Food Service was up 6.3%.

• Education and Health Services grew 4.7% with the addition of 25,676 jobs OTY. Educational Services added 5,041 jobs (7.2%) and Health Care & Social Assistance added 20,635 jobs (4.4%) OTY. Nursing & Residential Care Facilities grew 3.1% OTY, up from last month and the fourth month in a row to show OTY growth after losing jobs OTY since April 2020.

• Manufacturing posted 12,494 additional jobs, up 3.9% OTY. All published sectors showed growth OTY, though the Durable Goods sector drove the growth, adding 10,923 jobs, or 5.4%. Manufacturing employment growth continued to be stronger than the nation, which was at 2.9% OTY.

• Construction lost 3,468 jobs, down 2.8%. Losses in Construction were in both Heavy & Civil, down 11.4%, and Specialty Trade Contractors, down 2.3% OTY.

U.S. employment grew 2.9% OTY with the private sector up 3.2% in December. All supersectors showed OTY gains nationally. Minnesota’s OTY job growth in December outperformed that of the nation in total payroll employment and private sector employment as well as in six supersectors: Manufacturing, Trade, Transportation & Utilities, Financial Activities, Professional & Business Services, Education & Health Services, and Leisure & Hospitality.

Minnesota and U.S. Employment and Unemployment – December 2022

Seasonally Adjusted Not Seasonally Adjusted

Unemployment Rate December 2022 November 2022

December 2022

December 2021

Minnesota 2.5% 2.3% 3.0% 2.6%

U.S. 3.5% 3.6% 3.3% 3.7%

Non-Farm Jobs December 2022 November 2022 Dec. '21- Dec. '22 Level Change Dec. '21- Dec. '22

% Change

Minnesota 2,955,500 2,960,700 91,936 3.2%

U.S. 153,743,000 153,520,000 4,419,000 2.9%

Minnesota unemployment rate by race and ethnicity - 12 Month Moving Averages – December 2022

Month/Year Total Black Hispanic White

December-2022 2.6% 3.9% 3.8% 2.3%

November-2022 2.6% 4.3% 3.9% 2.1%

December -2021 3.8% 6.2% 4.7% 3.6%

February-2020 3.1% 4.5% 5.0% 3.0%

Source: Current Population Survey Demecon, 12-month moving averages. This data is volatile because of the small sample sizes. Monthly data is currently only available for the listed racial and ethnic groups.

Minnesota and U.S. Over-the-Year (OTY) Employment Change, Not Seasonally Adjusted: December 2021 – December 2022

MN OTY Job Change MN OTY Growth Rate (%) US OTY Growth Rate (%)

Total 91,936 3.2 2.9

Private 87,587 3.6 3.2

Mining & Logging 35 0.6 9.2

Construction -3,468 -2.8 3.2

Manufacturing 12,494 3.9 2.9

Trade, Transport. & Utilities 13,124 2.5 1.6

Information 890 2.1 4.8

Financial Activities 3,559 1.9 1.5

Prof. & Business Services 13,108 3.5 2.6

Ed. & Health Services 25,676 4.7 4.0

Leisure & Hospitality 23,084 10.0 6.5

Other Services -915 -0.8 3.1

Government 4,349 1.1 1.5

Metropolitan Statistical Area (MSA) Over-the-Year (OTY) Employment Change, Not Seasonally Adjusted: December 2021 – December 2022

(November 2021 – November 2022 for border state MSAs due to data delay from MSAs outside Minnesota.)

Metropolitan Statistical Area OTY Employment Change (#, NSA) OTY Employment Change (%, NSA)

Minneapolis-St. Paul MN-WI MSA 68,723 3.5

Duluth-Superior MN-WI MSA 1,385 1.1

Rochester MSA 3,386 2.8

St. Cloud MSA 1,758 1.6

Mankato MSA 1,310 2.3

Fargo-Moorhead ND-MN MSA (November) 600 0.4

Grand Forks-East Grand Forks ND-MN MSA (November) 400 0.7

La Crosse-Onalaska WI-MN (November) 700 0.9

Visit the DEED website to see DEED’s alternative measures of unemployment. You can also find monthly jobs numbers and unemployment data on DEED’s website. In addition, see related articles about job growth and labor market changes in the latest issue of Minnesota Employment Trends. Access 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, the JoinUsMn.com website, or follow us on Twitter.