New unemployment numbers still paint a gloomy picture for Minnesota
The Minnesota Department of Employment and Economic Development (DED) recently announced the unemployment numbers for October. According to the data, unemployment has declined from 5.9 percent in September to 4.6 percent in October. Unfortunately, much like last month, this change is entirely due to people leaving the labor force.
As DEED reports
the labor force participation rate declined to 67.4% in October from a revised 68.5% in September. Minnesota’s labor force participation rate was 70.2% in February 2020, prior to the pandemic’s effects.
Nationally, however, the labor force participation rate increased by 0.3 percentage points between September and October. The national unemployment rate decreased by 1.0 percentage point.
Minnesota and U.S. Employment and Unemployment – October 2020
|
|
Seasonally Adjusted |
Not Seasonally Adjusted |
||
|
Unemployment Rate |
October 2020 |
September 2020 |
October 2020 |
October 2019 |
|
Minnesota |
4.6% |
5.9% (revised) |
3.9% |
2.6% |
|
U.S. |
6.9% |
7.9% |
6.6% |
3.3% |
|
Employment |
October 2020 |
September 2020 |
October ’19- October ’20 Level Change |
October ’19- October ’20 % Change |
|
Minnesota |
2,793,400 |
2,780,200 |
-187,897 |
-6.2% |
|
U.S. |
142,373,000 |
141,735,000 |
-9,111,000 |
-6.0% |
Growth has slowed down
As previously noted, Minnesota’s job growth has continued to slow down. Additionally, job gains have been concentrated in industries heavily affected by the lockdowns.
Minnesota’s jobs picture continued to slowly improve in October with the addition of 13,200 payroll jobs, up 0.5% from September. The private sector added 12,900 of those jobs, up 0.5%. Minnesota lost 387,800 payroll jobs from February through April and has since gained back 203,600, or 52.5% of those jobs on a seasonally adjusted basis. The United States gained 638,000 payroll jobs in October, up 0.5% from September.
Newly added restrictions might potentially worsen this trend
Yesterday, Governor Walz signed an executive order temporarily shutting down bars, restaurants, and fitness centers, among others. While some business owners saw this coming, it does not mean there won’t economic be scarring.
Businesses that temporarily shutdown may have trouble reopening, especially if the shutdown is prolonged. The fact that people are getting discouraged and leaving the workforce would likely make it harder for businesses to hire workers once they reopen.