Employment numbers show that Minnesota might be in for a slow recovery

Just recently the Minnesota Department of Economic Development released the new employment numbers for January. The numbers present both good and bad news for our economy.

On the positive side, Minnesota has gained back the majority of job losses the state incurred in December. As reported by DEED,

In January, Minnesota gained 51,800 jobs, that is up 1.9%, on a seasonally adjusted basis, replacing all but 1,000 of the jobs lost in December (revised). January estimates are from the same week that bars and restaurants were able to again seat customers indoors, starting January 11. The private sector gained 48,900 jobs in January, up 2.1%, more than making up for the 47,100 lost in December. Government gained 2,900 jobs, up 0.7%.

However, the decline in Minnesota’s unemployment is yet still due to people leaving the workforce. In January this year, the unemployment rate dropped 0.2 percentage points from December. However,

The number of unemployed fell 7,652 and the number of employed fell 14,851 for a total decline of 22,503 in Minnesota’s labor force on a seasonally adjusted basis.


The labor force participation rate fell from 68.4% in December (revised) to 67.9% in January. Nationally, the labor force participation rate dropped one-tenth of one percentage point to 61.4%.

Additionally, our state has only gained less than 50% of the jobs lost between February and April 2020. Minnesota still has 7.8% (229,968) fewer jobs in January 2021 compared to January 2020.

Industry SupersectorOTY Job ChangeOTY Growth Rate (%)U.S. OTY Growth Rate (%)
 Total -229,968 -7.8 -6.1
 Private -205,547 -8.2 -6.2
 Logging and Mining -424 -6.8 -12.2
 Construction -4,829 -4.3 -2.5
 Manufacturing -15,557 -4.9 -4.4
 Trade, Transportation & Utilities -29,147 -5.5 -2.8
 Information -5,703 -12.4 -7.8
 Financial Activities -1,781 -0.9 -0.7
 Prof. & Business Services -27,535 -7.3 -3.6
 Ed. & Health Services -24,335 -4.4 -5.2
 Leisure & Hospitality -83,383 -31.8 -22.0
 Other Services -12,853 -11.3 -7.5
 Government -24,421 -5.7 -5.4

In December, Minnesota had one of the highest job losses in the nation. The fact that we gained those jobs back is a good sign we are moving in the right direction. However, the fact that we have only gained back less than 50% of jobs lost early in the pandemic is a sign of a slow and protracted recovery. Long-term job losses are very damaging to workers and bad for recovery.

Gov. Walz should lift all COVID-19 Restrictions

As I wrote before, there is indeed evidence connecting job losses to restrictions. And as we continue to see, the majority of current job losses are still concentrated in the hospitality industry, which is still under restrictions. In Minnesota, close to one-third of job losses that have not been gained back are in the hospitality industry.

All supersectors continued to show over-the-year job loss in MN and nationally. In Minnesota, over-the-year job losses were still greatest in Leisure & Hospitality, down 31.8% or 83,383 jobs. Other supersectors with a high share of job losses were Information, down 12.4% or 5,703 jobs, Other Services, down 11.3% or 12,853 jobs and Professional & Business Services, down 7.3% or 27,535 jobs over the year.

Gov. Walz announced today that he is loosening COVID-19 restrictions. The truth of the matter is, however, that fully lifting restrictions in Minnesota is the only way businesses, especially those in the hospitality sector, will be given a fair fighting chance for survival.

The evidence does not support the idea that lockdowns control. And given that our COVID-19 numbers have been consistently improving as well as the fact that the majority of our most at-risk individuals–the elderly– have gotten vaccinated, there is very little need for COVID-19 restrictions now, not that there ever was.