Minnesota’s economy shrank again in the second quarter of 2022, at an above average rate
Data released by the Bureau of Economic Analysis last week showed that, in the second quarter of 2022, Minnesota’s economy shrank, in real terms, at an annualized rate of 1.3%. This was more than twice the rate of contraction of the United States’ economy — 0.6% —and ranked Minnesota’s ‘growth’ 31st lowest.
Pre-pandemic, Minnesota’s Gross Domestic Product (GDP), like that of the United States, peaked in the fourth quarter of 2019. As Figure 2 shows, the United States regained its pre-pandemic peak of GDP in the first quarter of 2021, Minnesota in the second quarter of 2021. Both Minnesota and the United States hit a post-pandemic peak of GDP in the fourth quarter of 2021. For the last two quarters, both have seen GDP fall.
Figure 2: Real sustainable per capita Personal Income growth, 2019:Q4=100
Since the trough of GDP in the second quarter of 2020, the depths of the COVID-19 pandemic, Minnesota’s GDP has grown by 12.6% in real terms. This is below the national growth rate — 14.5% — and that of 31 other states. Relatively speaking, Minnesota’s economic rebound from COVID-19 has not been impressive.