Minnesota’s subsequent recovery has been below average. In three of the last five quarters our state’s economy has shrunk, including the first two quarters of 2022. While Minnesota’s economy grew again in the third quarter, our annualized rate — 2.3% — was below that of the United States as a whole — 3.2% — and ranked 29th among the states.
As a result of this sluggishness, Minnesota’s economy was only 2.2% bigger in the third quarter of 2022 than it was in the fourth quarter of 2019, the pre-COVID-19 peak, a performance worse than that in 34 other states and the District of Columbia.
From the third to the fourth quarter of 2022, Minnesota’s economy grew at an annualized rate of 1.3%. As Figure 1 shows, this ranked 35th highest out of fifty states and the District of Columbia. This was the third consecutive quarter of below average GDP growth for Minnesota, whose economic growth has been below average for 11 of the last 16 quarters.
Figure 1: Real Gross Domestic Product growth, 2022:Q3 to 2022:Q4
As Figure 2 shows, this sluggish growth means that Minnesota’s economy was only 2.6% bigger in the fourth quarter of 2022 than it was in the fourth quarter of 2019, the pre-COVID-19 peak, a performance worse than that in 33 other states and the District of Columbia.
Figure 2: Change in real Gross Domestic Product, 2019:Q4 to 2022:Q4