Minnesota’s Economic News — W/E 7/1/22
State and local taxes and spending CBS News: Scott Jensen seeks tax cuts to help Minnesotans cope with inflation Willmar Radio: Jensen wants to eliminate state income tax Voice of…
The Minnesota Department of Employment and Economic Development (DEED) recently published Minnesota’s April employment data.
Minnesota’s seasonally adjusted unemployment rate ticked down to 4.1% in April, from 4.2% in March, according to numbers released today by the Minnesota Department of Employment and Economic Development (DEED). The unemployment rate decline was due to people moving from unemployment to employment. The U.S. unemployment rate rose one-tenth to 6.1% in April.
For the fourth straight month, Minnesota gained jobs. Minnesota gained 11,300 jobs in April on a seasonally adjusted basis, up 0.4%, following growth of 20,400 (adjusted) jobs in March, 12,400 jobs in February and 51,600 jobs in January. Minnesota’s private sector gained 8,100 jobs of those 11,300 jobs in April, up 0.3%. The U.S. gained 266,000 jobs, up 0.2% over the month in April.
Minnesota lost 416,300 jobs from February through April 2020 and has since gained 235,300 jobs, or 56.5% of the jobs lost on a seasonally adjusted basis. The private sector has regained 57.7% of the jobs lost.
While Minnesota continues to gain jobs, hiring has slowed. This is also true at the national level as shown by the disappointing April jobs report. Nationally, job gains were only a little over a quarter of expected (266,000 vs 1 million).
For Minnesota, jobs added in April were the lowest since May 2020, that is without considering the job losses of November and December 2020.
Figure 1 : Minnesota total employment by month
Figure 2: Minnesota job gains (losses) by month
Giving unemployment benefits is a good way to help individuals sustain themselves while looking for a new job. And especially at the beginning of the pandemic when massive job loss befell the hospitality industry due to COVID-19 restrictions, the expanded unemployment insurance payments to some extent made sense.
However, when the economy is recovering, expanded unemployment payments provide an incentive for people to stay unemployed. This is something that was warned at the very beginning when payments were proposed. These disappointing job numbers are a result of incentives provided by high unemployment payments