First full month of COVID-19 impact shows decrease of nearly 360,000 jobs
Minnesota’s seasonally adjusted unemployment rate rose to 8.1% in April according to numbers released today by the Minnesota Department of Employment and Economic Development. The number of unemployed Minnesotans increased by 160,627 to a total of 249,453 from March to April. Seasonally adjusted payroll employment decreased by 359,800 jobs in April, or 12.2% with the private sector down 334,700 jobs, or 13.3%, during the month.
“DEED is dedicated to helping Minnesotans who have lost their job or had their hours reduced over the past two months,” said DEED Commissioner Steve Grove. “We were one of the first states in the nation to fully implement all three elements of the CARES Act to quickly get benefits out the door to as many people as possible. While the COVID-19 pandemic has challenged our state in many ways, we continue to work closely with our state agency partners and health, business and labor leaders to reopen Minnesota businesses, safely return more people to work, and stem the tide of COVID-19 on our economy.”
The employment numbers released today show the first full month of COVID-19 impact from mid-March when measures were first taken to slow the spread of COVID-19 through mid-April. In addition to monthly employment data, DEED analysts use other data to track employment. This includes daily data on the number of new and reactivated Unemployment Insurance applications. The latest daily Unemployment Insurance report showed 695,156 new applications and reactivated accounts from March 16 through May 20.
The number of people applying for Unemployment Insurance (UI) and the share of the labor force represented by those applying for UI is not the same as the official number of people who are unemployed or the monthly unemployment rate. The monthly unemployment rate is based heavily on a household survey called the Current Population Survey (CPS) conducted by the Bureau of Labor Statistics that asks about 900 households monthly in Minnesota about their work and job-seeking status. The period tracked through this survey ends in mid-month, so reflects the employment situation through the first part of April.
Unemployment Insurance applicant data does not match unemployment data for several reasons. One key reason is that workers can apply for and receive unemployment benefits if their hours have been cut but they are still working. Such workers would not be counted as unemployed in the official unemployment rate. In the official rate, if a person works even one hour a week they are counted as employed, not unemployed.
Minnesota’s Labor Market Information (LMI) Office maintains a variety of data tools to provide updated and accurate information to agency and state leadership, as well as to local governments, development agencies, social service providers and employers to help leaders make decisions during these difficult times. Among the regularly updated public data tools on the DEED website are the UI Data Tools which have daily, weekly and monthly data broken out by applicant demographics, geography and occupation.
Minnesota's labor force numbers fell by 31,594 individuals in April. As a result, Minnesota’s labor force participation rate declined to 68.8% in April from 69.1% in March, and 70.2% in February. Minnesota’s unemployment rate rose from 2.9% (revised down from 3.1%) in March to 8.1% in April. The national unemployment rate rose from 4.4% in March to 14.7% in April.
Minnesota lost 387,894 payroll jobs, down 13.1% over the year, while the Private sector lost 361,673 jobs, down 14.3%. All supersectors lost jobs in April over the year with the exception of Mining which added 101 jobs. By far the largest relative declines were in Leisure & Hospitality, down 148,593 jobs or -55.5% followed by Other Services, down 32,245 jobs or -28.3% over the year. Job losses in these two supersectors alone accounted for 47% of all over the year job losses in April.
Over the year, employment fell in all Minnesota MSAs in April. It is interesting to note that the three regions with the largest employment declines experienced them for different reasons. The Duluth-Superior MSA had a higher than state average concentration of employment in Leisure & Hospitality which was hit hardest during the pandemic. Likewise, at just over 43%, the Rochester MSA has the largest share of employment in Education and Health Services of any MSA in the state, and saw a nearly 10% decline in that domain over the year. As the largest metro area in the state, the Twin Cities has over two-thirds of the state’s total employment, and slightly more than two-thirds of the state’s jobs in the hard hit Leisure & Hospitality, Other Services, and Information industries, as well as a higher concentration of employment in non-critical Retail Trade subsectors that were directly impacted. Retail Trade dropped -12.1% year-over-year in the Twin Cities, compared to -7.7% in Duluth and -5.9% in Rochester.