Minnesota Index

The Minnesota Index ended the year on a sour note, remaining unchanged from November’s reading. After racing along with 0.3 percent monthly increases from April to August, Minnesota’s index lost momentum during the last four months of 2014. The flat reading in December implies that Minnesota’s economy failed to expand for the first time since January 2010. Minnesota’s unemployment rate continued to drop in December, but wage and salary employment declined, and waning average weekly manufacturing hours kept the index from advancing. The U.S. index continued to race ahead in December increasing 0.3 percent for the 11th straight month. Minnesota economic growth as measured by the Minnesota index has trailed U.S. economic growth over the last four months.

Minnesota’s index was up only 2.6 percent from a year ago which is the smallest over-the-year gain since December 2010. The U.S. index was up 3.5 percent from a year ago. Minnesota’s over the year increase hasn’t fallen this far below the U.S. increase since March 2007. Minnesota’s economic recovery from the Great Recession was ahead of the nation’s recovery until this month. As of December, Minnesota’s economy is up 14.8 percent from September 2009, while the U.S. economy is 15.1 percent larger. Past slowdowns in Minnesota’s index have been revised away as data is revised, so it is too soon to draw any firm conclusions about the strength of Minnesota’s economy especially since other indicators are giving more favorable signals about the state’s economy.

Graph: Minnesota Index and U.S. Index