Minnesota’s unemployment rate falls to 3.7%

Minnesota’s unemployment rate dropped to 3.7% in September, down from 3.8% in August and 3.9% in July, the Minnesota Department of Employment and Economic Development announced Thursday.

The state’s unemployment rate is below the national rate of 4.8%. Minnesota gained 17,100 jobs — an increase of about 0.6%, far outpacing the national jobs growth rate of 0.1%, according to DEED.

The jobs growth is encouraging, but the labor market is still “incredibly tight,” said DEED Commissioner Steve Grove in a statement, meaning employers are struggling to find workers.

So far, Minnesota has regained about 70% of the 416,300 jobs lost between February and April 2020. That means the state is still down about 126,600 jobs compared to early 2020.

The state’s labor force participation rate is still down significantly compared to pre-pandemic, at about 67.9%. Before March 2020, labor force participation hadn’t dipped that low since the early 1980s. Some workers have stopped seeking work for a number of reasons, including concerns over COVID-19 and lack of child care.

Black workers remain hardest hit by job loss. The unemployment rate for demographic groups has been difficult to track given the volatile labor market, according to DEED, so the agency has turned to adjusted unemployment rates based on 12-month moving averages. Under this calculation, DEED estimates overall unemployment was at about 6.3% in September 2021, and 8.4% for Black workers, 5.1% for Latino workers and 5.9% for white workers.