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Data shows Minnesota’s metropolitan areas slipping relative to its neighbors

Yesterday saw the release by the Bureau of Labour Statistics of its estimates of Metropolitan Area Employment and Unemployment.

As I’ve written previously, these can be a useful way to compare economic performance. Minnesota’s economy differs from those of near neighbors such as Iowa and North Dakota. This restricts the usefulness of comparisons of state level data. This variation is a little less pronounced between urban areas.

Minnesota and its neighbors

So what did the BLS data show?

Table 1 shows the 29 metropolitan areas in Minnesota and the neighboring four states ranked by the percentage point declines in their unemployment rates from August 2016 to August 2017. On this measure, Wisconsin (white areas) has done best. Of the fifteen MSAs which have seen their unemployment rate fall fastest, ten were in the Badger State. By contrast, three of Minnesota’s five MSAs were among the bottom performing ten. Duluth is our state’s best performer.

Figure 1

Source: Center of the American Experiment and the Bureau of Labor Statistics

Isn’t this because unemployment was higher in these areas of Wisconsin to start with so had further to fall?

There is some truth in that. Table 2 shows the 29 metropolitan areas ranked by their unemployment rates of August 2016. Of the ten MSAs with the highest unemployment rates, seven were in Wisconsin. Even so, three of Minnesota’s five MSAs – Duluth, the Twin Cities, and St Cloud – had unemployment rates above the average of 3.5%.

Figure 2

Source: Center of the American Experiment and the Bureau of Labor Statistics

Figure 3 shows  the 29 metropolitan areas ranked by their unemployment rates of August 2017. The picture is rather different. Wisconsin’s share of the worst performing ten is down from 70% to 40%. Minnesota’s, by contrast, is up from 10% to 30%. The same amount of Minnesotan MSAs are above the average – 3.1% – as there were last year, but they are now further above it.

Figure 3

Source: Center of the American Experiment and the Bureau of Labor Statistics

With the previously mentioned caveats about state level data, let’s finish with a quick look at our state and its four neighbors in Figure 4.

In August 2016, Minnesota had the second highest unemployment rate of the five states with Wisconsin’s higher. In August 2017, our state had fallen to last place as the jobs boom across the St Croix continued. Last August, Wisconsin’s unemployment was 4.0% and Minnesota’s was 3.8%. Last month, Wisconsin’s unemployment rate of 3.4% was below Minnesota’s of 3.6%.

Figure 4

Source: Center of the American Experiment and the Bureau of Labor Statistics

Minnesotans cannot take their economy for granted 

This is just one release from one data set. It would be ridiculous to infer impending economic doom from these numbers. But prosperity cannot be assumed, it must be nurtured. To do this, we have to keep a close eye on all the indicators of economic health.

John Phelan is an economist at Center of the American Experiment.

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