New unemployment numbers still paint a gloomy picture for Minnesota

The Minnesota Department of Employment and Economic Development (DED) just recently announced the unemployment numbers from October. According to the new figures, unemployment has declined from 5.9% in September to 4.6% in October. And much like last month, the new change is entirely due to a decline in labor force participation.

As reported by DEED, “the labor force participation rate declined to 67.4% in October from a revised 68.5% in September. Minnesota’s labor force participation rate was 70.2% in February 2020, prior to the pandemic’s effects.” Nationally, however, the labor force participation rate increased by 0.3 percentage points between September and October. The national unemployment rate decreased by 1.0 percentage points.

Minnesota and U.S. Employment and Unemployment – October 2020

Seasonally Adjusted

Not Seasonally Adjusted

Unemployment Rate

October 2020 

September 2020

October 2020

October 2019



5.9% (revised)









October 2020

September 2020

October ’19- October ’20 Level Change

October ’19- October ’20 

% Change











source: DEED

Growth has slowed down

As previously noted, Minnesota’s job growth has continued to slow down, and that trend has continued to October. Additionally, job gains have been concentrated in industries heavily affected by the lockdowns.

Minnesota’s jobs picture continued to slowly improve in October with the addition of 13,200 payroll jobs, up 0.5% from September. The private sector added 12,900 of those jobs, up 0.5%. Minnesota lost 387,800 payroll jobs from February through April and has since gained back 203,600, or 52.5% of those jobs on a seasonally adjusted basis. The United States gained 638,000 payroll jobs in October, up 0.5% from September.

Newly added restrictions might potentially worsen this trend

Yesterday, Governor Walz signed an executive order temporarily shutting down bars, restaurants, fitness centers among other things. These were measures some business owners saw coming. But that does not mean that they have a better way to weather the storm.  Some business owners have become resigned to the fact that there may be no end in sight to these restrictions.

In fact, the Star Tribune reported the following on Nov 13th, after Governor Walz had ordered early closing of restaurants and bars as well as more restricted capacity,

Anticipating new restrictions, Lindsay Pohlad closed her Wayzata restaurant the Grocer’s Table on Sunday to reassess the layout and come up with a plan, should indoor dining be halted completely.

When it reopens Wednesday, indoor seating will be down to less than 25% capacity. So when Pohlad learned of the 10 p.m. curfew, she was initially relieved. Her restaurant closes at 8 p.m. during the week and 9 p.m. on weekends.

But she isn’t relaxing just yet. With cases on the rise, Pohlad expects there to be more restrictions in the months ahead.

The curfew “is probably the first step of a couple changes that are going to happen,” she said. “I think we’re all just hanging in there to get through this winter and holding on to the idea of a bright spring.”

While shutting down temporarily might help some businesses reevaluate and plan accordingly, to most it is quite a risky gamble. Businesses that temporarily shut down may have trouble reopening especially if the shutdown gets prolonged. We have already seen temporary shutdowns turn to permanent shutdowns with a lot of businesses at the beginning of these lockdowns.

The fact that people are getting discouraged and leaving the workforce means that in Minnesota, a business’s ability to hire workers back in order to reopen will be heavily affected. Additionally, the shutdown orders in Minnesota have been associated with high levels of uncertainty, so how are business owners supposed to plan for the long-term survival of their establishments?

On Wednesday, Minnesota faced what was reported as a record-high number of 61 Covid-19 deaths. However, 51 of those were from residents of Long term care facilities. In fact “More than 80% of COVID-19 deaths in Minnesota have involved people 70 or older, and more than 68% have involved long-term care residents”.

It is quite unfortunate, especially in light of the new unemployment numbers, that the state is choosing to subject an inevitable doom even when it seems that this will unlikely change Covid-19 outcomes.