Minnesota’s unemployment rate falls to 3.7 percent; wages rising

A job seeker fills out an application
A job seeker fills out an application during a career fair. Minnesota has now gained back about 70 percent of the more than 416,000 jobs lost since the start of the COVID-19 pandemic.
Justin Sullivan | Getty Images 2014

Minnesota's unemployment rate fell to 3.7 percent in September, as schools resumed and more people returned to the labor force.

The state Department of Employment and Economic Development reported that Minnesota added 17,100 jobs last month, outpacing national employment gains.

DEED Commissioner Steve Grove said Minnesota has now gained back about 70 percent of the more than 416,000 jobs lost since the start of the COVID-19 pandemic.

"We knew that obviously that coming into the fall, with kids going back to school and dynamics changing, that we expected or hoped to see a growth in employment and jobs,” Grove said. “We did begin to see some of that.”

However, it’s too soon to tell whether the positive job gains are the start of a long-term trend, Grove said.

Minnesota’s job gains last month outpaced the nation as a whole. In comparison, the U.S. seasonally adjusted unemployment rate in September was 4.8 percent.

The state’s employment growth last month occurred across many different industries. The leisure and hospitality sector gained nearly 10,000 jobs. Transportation, construction and professional services also added jobs, while losing sectors included financial services and government.

The dip in government jobs was mainly at the state level, and probably is largely related to enrollment declines at colleges and universities, Grove said.

Overall, the labor shortage has pushed up wages, as employers compete for workers. Average hourly earnings have climbed 7.4 percent since September 2019, Grove said.

“We've seen wage rates really skyrocket in Minnesota this year,” he said. “I think it's just a testament to the fact that employers are paying more money because they need to in a tight labor market."

However, racial disparities in the state's labor force continue, with Black Minnesotans more likely than white residents to be unemployed or to have dropped out of the workforce.

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