Latest: December 3, 2015
Minnesota’s labor market performance has been impressive since the recession ended over six years ago. The state has added more than 50,000 jobs since employment surpassed its pre-recession peak in mid-2013, and most indicators suggest the labor market continues to tighten considerably. The number of job vacancies in Minnesota has soared to the highest level since 2001, and the state’s jobless rate was down to 3.7 percent in October, matching the low that has prevailed since mid-2014. With the excess supply of workers rapidly diminishing, a tighter labor market is leading to some long-awaited wage acceleration. It increasingly appears that Minnesota is near its full employment potential.
Nonetheless, Minnesota’s economy faces challenges. Manufacturing, mining, and agricultural activity in the state has struggled in 2015, as Minnesota producers adjust to lower commodity prices, the strong dollar, and weak global growth. The pace of the state’s housing recovery has been slow in part due to persistently slow household formation, although there are recent signs of improvement. Moreover, Minnesota’s labor force growth remains weak, despite the fast-tightening job market. This is impeding the state’s ability to increase employment. MMB’s economic forecast depends on stronger labor market conditions beginning to translate into improvements in household formation, the supply of labor, and productivity, thereby putting further upward pressure on hourly wage growth.
MMB’s November 2015 economic forecast calls for Minnesota’s expansion to continue over the next several years, but at a generally slower pace than the national average. Both employment and wage income growth are expected to remain modest in 2016 and 2017, with the average nominal wage slowly accelerating. The forecast expects small improvements in household formation, labor force growth, and labor productivity.
Read More :
>> Minnesota Economic Outlook (pdf)
U.S. Economic Outlook
Data Tables :
>> Minnesota Annual Forecast Data (xlsx)
>> U.S. Annual Forecast Data (xlsx)
Note: These economic forecasts were prepared in November 2015, and are based on information available at that time.
Sign up to receive Forecasts and Updates by email.