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St. Paul – Minnesota’s unemployment rate improved slightly and dropped one-tenth of a percentage point to 3.8% in August due to people moving out of unemployment and into employment, according to numbers released today by the Minnesota Department of Employment and Economic Development (DEED).  

Minnesota’s labor force participation rate held steady at 67.8% in August. Nationally, the unemployment rate fell two-tenths of a percentage point to 5.2% and the labor force participation rate held steady at 61.7%. 

Minnesota gained 4,300 jobs, up 0.2%, in August on a seasonally adjusted basis. The private sector gained 6,200 jobs, up 0.3%.

The U.S. gained 235,000 jobs, up 0.2% over the month in August, with the private sector up 243,000 jobs or 0.2%. 

Minnesota job gains in July were revised upward by 2,600 jobs in total employment and 3,100 in the private sector.

This brings total employment from a gain 0.5% to 0.6% and private sector employment from a gain of 0.4% to 0.5% in July.

Accommodations & Food Services saw the largest revision, up an additional 1,200 jobs in July. 

“It’s great to see continued job growth, especially after the strong month we had in July,” DEED Commissioner Steve Grove said. “As fall begins we will re-double our efforts to highlight the extraordinary opportunities that exist in our economy now – and work directly with businesses and job seekers to accelerate hiring.” 

Many Minnesotans continue to be out of work, but the employment impact of the pandemic on workers has been difficult to measure. 

The pandemic caused some people to drop out of the workforce, lowering labor force participation, which resulted in an unemployment rate below what would be expected given job losses. 

The table below accounts for this by showing an adjusted unemployment rate that includes both Minnesotans who are looking for work now and who would have been expected to be working or looking for work if it wasn’t for the impact of the pandemic.   

Adjusted Unemployment Rates, Minnesota, 12-month moving average 

Month/Year 

All 

Black 

Hispanic 

White 

Aug-21 

6.4% 

8.4% 

4.7% 

5.9% 

Jul-21 

6.4% 

9.3% 

5.0% 

6.0% 

Aug-20 

5.9% 

14.4% 

9.6% 

5.1% 

 

Average wages and weekly hours have gone up significantly over the past year as a result of the tight labor market.

Average hourly wages for all private sector workers rose 9 cents in August and rose $1.00, or 3.2%, over the year and $2.42, or 8.0%, since August 2019.

Private sector average weekly hours ticked up in August for the second month.

Compared to one and two years ago in August, hours are up 1.1% and 3.5% respectively.

Another sign of the tight labor market is the drop in teen unemployment to 6.2% in August, down 4.8 percentage points over the year in Minnesota.

This is the second lowest August teen unemployment rate on record, dating back to 2002; the only time August teen unemployment was lower was in August 2018 at 5.7%. 

Six supersectors gained jobs in August and five lost jobs on a seasonally adjusted basis.   

  • Gains were in Manufacturing up 2,300 jobs
  • Leisure & Hospitality, up 2,000 jobs
  • Trade, Transportation & Utilities, up 1,500 jobs
  • Financial Activities, up 1,300 jobs
  • Professional & Business Services, up 900 jobs 
  • Construction, up 600 jobs.   
  • Losses were in Government, down 1,900 jobs
  • Education & Health Services, down 1,200 jobs
  • Information, down 600 jobs
  • Other Services, down 500 jobs
  • Mining & Logging, down 100 jobs.   

Job growth has been uneven coming out of the pandemic recession, with some relatively dramatic swings from month to month.

Translating seasonally adjusted job change into a 3-month moving average series provides a clearer look at job growth trends.

Those moving averages show Minnesota added 9,100, up 0.3%, in April-June; 10,333 jobs, up 0.4%, in May-July; and 8,767 jobs, up 0.3%, in June-August.

Nationally, this compares to 0.4% in April-June, 0.6% in May-July and 0.5% in June-August. 

Minnesota lost 416,300 jobs from February through April 2020 and has since gained 272,700 jobs, or 65.5% of the jobs lost on a seasonally adjusted basis. The private sector has regained 67.0% of the jobs lost. 

Over the year, Minnesota gained 109,834 payroll jobs, up 4.0%.

The private sector gained 103,012 jobs, up 4.3% over the year. U.S. employment grew 4.4% over the year with the private sector up 5.2% in August.

Four supersectors in Minnesota show strength over the year compared to the U.S.: Leisure & Hospitality, Government, Construction and Manufacturing.

The first two of those four supersectors lost a greater share of jobs in April 2020 compared to the nation and therefore had more ground to make up over the year compared to the nation.  

Employment rose over the year in all Minnesota Metropolitan Statistical Areas. Growth was strongest in the Duluth-Superior and Mankato Metropolitan Statistical Areas. 

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