Minnesota’s economy returns to growth, but continues to lag national rate
Minnesota’s economy shrank in the first two quarters of 2022. Data released by the Bureau of Economic Analysis today show that, in the third quarter, our state’s economy grew again, but at a rate below that of the United States generally, 2.2 percent compared to 3.2 percent. Indeed, as Figure 1 shows, our state’s Gross Domestic Product (GDP) growth in the third quarter ranked joint 29th.
Figure 1: Percentage change in real GDP, Q2:2022 to Q3:2022, %, annualized
Indeed, while Minnesota is not one of the ten states with GDP lower than in the fourth quarter of 2019 — the pre-COVID-19 peak nationally — its real growth since then, 2.2 percent, ranks it 36th, as Figure 2 shows. For the United States generally, GDP was 4.2 percent higher in the third quarter of 2022 than in the fourth quarter of 2019.
Figure 2: Change in real GDP, 2019:Q4 to 2022:Q3
In our annual reports on Minnesota’s economy, we have consistently pointed out that our state has long suffered from below average economic growth. As we strive to recover from the COVID-19 pandemic, that remains the case.