Minnesota's official unemployment rate is a useful indicator of the health of the state’s economy, but it does not tell the whole story. We can get a more complete picture of Minnesota's labor market by looking at alternative measures of unemployment, and by providing the rates by age, gender, and race. The numbers below come from the Current Population Survey.
Use these estimates with caution. The Current Population Survey, which produces these data, has a sample size of only 900 households in Minnesota making it too small to publish monthly estimates for subpopulations. This report uses the BLS unpublished 12-month moving averages. Rolling together 12 months of data is the most reliable method of publishing estimates for subpopulations in Minnesota but means that turning points in the data lag by 6 months. Moreover, even rolling 12 months of data together results in high standard errors on the estimates, reliability issues and limitations on which demographic groups can have labor force estimates published. Essentially, the data provided in this report should be viewed as indicators rather than as reliable estimates.
The Bureau of Labor Statistics has developed alternative definitions of unemployment and underemployment (see Table 1). The official unemployment measure, called U-3, is the share of those aged 16 and over who, at the time of the monthly survey, were not employed in the past week and who looked for work sometime in the past four weeks. U-3 excludes anyone who was not seeking work in the past month (unless they were temporarily unemployed and have a date by which they will return to the same employer). This group, those not seeking work, is considered not in the labor force. Note that the U-3 number reported in this analysis will differ from the official state unemployment estimate because it is based on a 12-month moving average.
In February, the U-3 stood at 2.7%, which is down from 3.5% one year ago. In February 2020, just prior to the pandemic recession, the U-3 rate was 3.1%. February’s rate is an all-time low for this series, which goes back to 2001.
The U-4 adds people who want a job but aren’t actively searching because they think there are no jobs available that fit their qualifications, also known as discouraged workers, to the count. Discouraged workers are those who have looked for work in the past year but stopped looking in the past month because they think they cannot find a job.
In February, U-4 stood at 2.8%, and 3.7% one year ago.
In February, there were 3,900 discouraged workers, the same as in January, and down from 4,700 one year ago.
U-5 adds all the other “marginally attached” workers, people who looked for work sometime in the past twelve months but, for reasons other than discouragement, did not look in the past four weeks, to the count of unemployed.
In February the U-5 was 3.4% compared to 4.4% one year ago.
The broadest measure of unemployment, U-6, includes all the above and adds people who are employed part-time but want full-time work.
In February, the U-6 was 4.8% in February and 6.2% one year ago. February is down from 5.6% in February 2020 prior to the pandemic. February’s rate is an all-time low for this series, which goes back to 2001.
In February, there were 17,900 involuntary part-time workers, down from 23,600 in January. There were 38,600 a year ago and 35,100 in February 2020. February 2023’s number is an all-time low for the series, which goes back to 2001.
Table 1. Alternative Unemployment Rates, Minnesota, 12-month Moving Average
|Number of Discouraged Workers||3,900||3,900||4,700||0||-800|
|Number of Involuntary Part-Time Workers||17,900||23,600||38,600||-5,700||-20,700|
*Definitions of Measures:
U-3 Official unemployment rate
U-4 Discouraged plus officially unemployed
U-5 All marginally attached (including discouraged) plus officially unemployed
U-6 Involuntary Part Time plus marginally attached, discouraged, and officially unemployed
Involuntary Part time—a component of U-6, including only persons working less than 35 hours per week who want, but cannot find, a full-time job
Long-term unemployment—lasting more than 27 weeks — imposes costs on people that go well beyond lost wages, including lower future earnings (see Table 2).
In February, the number of long-term unemployed rose slightly to 9,300 and was down from 30,800 a year ago. It is a little lower than in February 2020 when it was at 11,100.
The share of long-term unemployed rose to 11.4% and was down from 28.7% a year ago.
The median duration of unemployment dropped slightly to 7.6 weeks and was down from 14.1 weeks one year ago but up from 7.5 in February 2020.
Table 2. Long-term Unemployment, Minnesota, 12-month Moving Average
|Median Duration of Unemployment (weeks)||7.6||7.7||14.1||-0.1||-6.5|
*Long term is defined as more than 27 weeks. The share of long term is expressed as a percentage of all unemployed (U-3).
The labor force participation rate for Black Minnesotans rose to 69.7% in February, which is the same as one year ago and higher than the labor force participation rate for white Minnesotans. The employment to population ratio rose to 67.3%, up from 65.2% a year ago. The unemployment rate dropped to 3.4% in February and is down 3.1 points compared to a year ago.
The labor force participation rate for Hispanic Minnesotans rose to 75.6% in February, down 3.9 percentage points over the year. The employment to population ratio rose to 72% in February and was down 3.8 points from one year ago. The unemployment rate ticked up to 4.8% in February and was up 0.1 points over the year.
The labor force participation rate for white Minnesotans fell slightly to 67.2% in February, down 1.2 points over the year. The employment to population ratio ticked down to 65.6% which is 0.7 points lower than last year. Unemployment rose to 2.4% in February and was down 0.8 points over the year.
The labor force participation rate for Native American Minnesotans was 60.3% in 2021 compared to 68.4% for the total population aged 16 and older. The employment to population ratio for Native American Minnesotans was 53.9% compared to 65.0% for the total population and the unemployment rate was 10.5% compared to 4.9% for the total population. These are annual data from the 2021 American Community Survey 1-year estimates and are not comparable to the numbers elsewhere in this article.
Tables 3, 4 and 5 display labor force participation rates, employment to population ratios and unemployment rates for the total population, Black, Hispanic and White Minnesotans for the current months and comparisons to previous months using 12-month moving averages.
Table 3: Labor Force Participation Rates by Race or Ethnicity, Minnesota, 12-month Moving Average
|Over the month change||-0.3||-0.3||-0.9||0.1|
Table 4. Employment to Population Ratios by Race or Ethnicity, Minnesota, 12-month Moving Average
|Over the month change||-0.4||-0.4||-0.8||-1.0|
Table 5. Unemployment Rate by Race or Ethnicity, Minnesota, 12-month Moving Average
|Over the month change||0.2||0.2||-0.2||1.5|
The labor force participation rate for women fell to 63.5% in February, which was down 0.4 points from one year ago. The employment to population ratio ticked down to 62.2% and was up 0.5 points from one year ago. The unemployment rate remained at 2.0% in February and was down 1.4 points over the year.
The labor force participation rate for men ticked down to 71.7% which is 0.9 points lower than one year ago. The employment to population ticked down to 69.4% and was down 0.6 points from one year ago. The unemployment rate rose to 3.2% in February and was down 0.4 points over the year.
Table 6. Labor Force Indicators by Gender, Minnesota, 12-month Moving Average
|Month/Year||Labor force participation rate||Employment to population ratio||Unemployment rate|
The teen (age 16-19) unemployment rate was 7.1% in February, up 1.5 points over the year. The labor force participation rate rose to 52.9% while the employment to population ratio rose to 49.1%.
Table 7. Teen Unemployment Rate, Minnesota, 12-month Moving Average
|Teen (Age 16-19)