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Labor Force Participation Rate Steady; Unemployment Rate Ticks Up

Minnesota’s labor force participation rate remained at 68.0% in May, one of the highest in the country, according to numbers released today by the Minnesota Department of Employment and Economic Development (DEED). Minnesota’s unemployment rate ticked up one-tenth of a percent to 2.8%, which denotes a small loosening of the state’s extremely tight labor market. Nationally, the unemployment rate ticked up one-tenth of a percentage point to 4.0% and the labor force participation rate fell two-tenths of a percentage point to 62.5% over the month.

Additionally, after several months of job growth, Minnesota employers pulled back last month with the state losing 8,600 jobs from April to May on a seasonally adjusted basis, a 0.3% decline. Minnesota's private sector lost 9,800 jobs, down 0.4% over the month. Minnesota has gained jobs nine out of the last 12 months. The U.S. total nonfarm employment increased by 0.2%, with the U.S. private sector also up 0.2%.

“We’ll be keeping a close eye on job and labor force growth. We continue to believe that job growth, particularly in certain sectors, is constrained by a lack of available workers with necessary skills,” said DEED Commissioner Matt Varilek. “DEED and our agency partners continue to reach out to Minnesotans looking for work to help them prepare for in-demand employment. Earlier this week, Governor Walz and Lt. Governor Flanagan announced grantees who will help prepare 2,100 Minnesotans from underserved communities for employment in construction, health care and manufacturing, among other sectors.”

Over the month, seven supersectors in Minnesota gained jobs on a seasonally adjusted basis, most notably, Education & Health Services up 2,800 jobs and Government up 1,200 jobs. Four supersectors in Minnesota lost jobs over the month, with Professional & Business Services down 9,300 jobs and Manufacturing down 3,700 jobs.

“The bulk of May’s over-the-month job decline was in the Administrative and Support and Waste Management and Remediation Services subsector of Professional & Business Services, which saw a loss of 8,100 jobs from the month prior. It’s a broad subsector that includes temporary employment services,” said DEED's Labor Market Information Director Angelina Nguyễn. “At this point the large decline is a single data point, not a trend.”

Over the year, Minnesota gained 34,950 payroll jobs, up 1.2%. Minnesota’s private sector gained 12,079 jobs, up 0.5%. Overall U.S. employment grew 1.8% over the year with the private sector up 1.6%.

Five supersectors posted positive annual growth in Minnesota, led by Education & Health Services, which gained 31,270 jobs. Six supersectors lost jobs over the year in Minnesota, led by Professional & Business Services, which lost 16,308 jobs.

Minnesota wage growth is outpacing inflation as well as national wage growth. Average hourly wages for all private sector workers in Minnesota increased 14 cents, to $37.12, in May 2024 over the month. Over the year average hourly earnings increased $1.92, up 5.5%. For the U.S., private sector wages decreased 4 cents over the month and grew 4.0% over the year. The Consumer Price Index, a common measure of inflation, rose 3.3% over the year in May, meaning that wage growth in Minnesota has outpaced inflation over the year.

Regionally, job growth in the Rochester Metropolitan Statistical Area continued its strong streak, with over the year growth of 4,707 jobs, up 3.8%.

DEED is the state’s principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. Visit the DEED website to view state and national employment statistics, monthly jobs numbers and data. You can also find alternative measures of unemployment on the DEED website. In addition, see related articles about job growth and labor market changes in the latest issue of Minnesota Employment Trends. Find out how DEED delivers for Minnesota by visiting the DEED website,  JoinUsMn.com, CareerForceMN.com or follow us on X.

 

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