Rate ticks down as people leave labor force; Minnesota loses jobs for second month

Minnesota’s seasonally adjusted unemployment rate dropped to 4.4% in December, down from a revised 4.5% in November, according to numbers released today by the Minnesota Department of Employment and Economic Development (DEED). The tenth of a percentage point tick down was due to people leaving the labor force, at least temporarily, and happened as Minnesota lost 49,800 jobs in December. The private sector lost 42,900 jobs in Minnesota in December, down 1.8% and Government lost 6,900 jobs, down 1.7%. 

December employment numbers reflect impact of the late fall spike in COVID-19 cases. Sectors dependent on groups of people gathering together, including restaurants and bars, entertainment venues, and fitness centers, showed job losses. The Leisure & Hospitality sector led job losses in December with a decline of 41,100 jobs last month. 

“Today’s employment data confirms what we’ve expected – the spike in cases in late fall had an impact on the economy,” said DEED Commissioner Steve Grove. “The predictable loss of jobs that accompanied the sacrifice that businesses and workers had to make may turn out to be temporary, as just 10% of those surveyed said their job loss was permanent.” 

Minnesota lost jobs for the second month in a row, losing 49,800 payroll jobs, down 1.8%, in December on a seasonally adjusted basis following a loss of 15,500 jobs (revised) in November. Job losses in November and December erase job gains made from August through October. Minnesota lost 387,800 jobs from February through April and has since gained 140,300 jobs, or 36.2% of the jobs lost on a seasonally adjusted basis. This is down from October, when Minnesota had regained 205,600, or 52.5% of jobs lost during the pandemic, on a seasonally adjusted basis.  

Over the year in December, Minnesota shed 238,056 payroll jobs, down 8.0%, with private sector jobs down 7.9% in December. U.S. over-the-year job loss stood at 6.0% with the private sector down 6.1% in December, unchanged from November.   

Minnesota’s labor participation rate fell 0.4 to 67.5% in December, and the U.S. labor force participation rate held steady at 61.5%. The U.S. unemployment rate also remained steady at 6.7%. 

Minnesota tracks unemployment rates for certain ethnic groups based on rolling averages to help account for small sample sizes. Based on rolling averages over the last six months, from July to December 2020, the unemployment rate for Black Minnesotans fell to 5.5% in December from 11.1% in November. For Latinx Minnesotans, unemployment is at 6.0%, down from 7.7% in November. White Minnesotans have a six-month-rolling-average unemployment rate of 5.2%, down from 5.6% in November. Declines in six-month-rolling-average unemployment rates in December reflect the high unemployment month of June dropping out of the average, people finding employment, and people dropping out of the labor force, at least temporarily. 

All supersectors continued to show over-the-year job loss in Minnesota and nationally. In Minnesota, over-the-year job losses were still greatest in Leisure & Hospitality, down 43.7% or 116,429 jobs, and Information, down 15.9% or 7,301 jobs. Other supersectors with a high share of job losses were Other Services, down 13.5% or 15,499 jobs, Logging & Mining, down 11.4% or 694 jobs, and Government, down 8.4% or 36,152 jobs over the year.     

Four supersectors in Minnesota showed strength over the year compared to the U.S.: 

Trade, Transportation & Utilities was down 1.7% in Minnesota compared to 2.4% nationwide over the year. Strength here was in Retail Trade, down 505 jobs or 0.2% over the year compared to 2.7% nationally. Minnesota also showed strength in Utilities, which was flat over the year in Minnesota and down 1.8% nationwide. 

Professional & Business Services was down 1.3% in Minnesota compared to 3.7% nationwide. Minnesota’s strength was in both Management of Companies and Enterprises, down 1.2% in Minnesota and 3.2% nationwide, as well as Administrative & Support & Waste Services, down 0.5% in Minnesota and 6.0% nationwide. Within that sector, Employment Services (temp help) was up 0.9% or 543 jobs over the year in Minnesota compared to a drop of 6.4% nationwide.   

Manufacturing fell 3.3% in Minnesota compared to 4.2% nationwide over the year in December. The strength here was in Nondurable Goods, particularly Food Manufacturing where Minnesota employment grew 3.2% over the year while nationally employment fell by 1.4%. Medical Equipment and Supplies also showed strength, up 2.3% over the year in Minnesota. 

Logging & Mining job loss in Minnesota remains just below U.S. job loss, with Minnesota down 11.4% and the U.S. down 11.8%.   

Employment fell in December over the year in all Minnesota Metropolitan Statistical Areas. 


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