Economic Development: Minnesota Finishes 2014 Strong
Despite earlier predictions of a slowing economy, Minnesota has continued to post rosier employment and financial figures as the year comes to an end.
For November, the state’s unemployment rate fell to 3.7 percent, the lowest since May 2001 and much better than the national rate of 5.8 percent. Much can be attributed to the last three months, when Minnesota added nearly 29,000 jobs in what is the strongest three-month span for job growth on record.
“The change in the unemployment rate from 4.5 percent in July to 3.7 percent in November is particularly notable given the labor force participation rate held steady during that period, on top of adding jobs to the economy,” Katie Clark Sieben, commissioner of the Minnesota Department of Employment and Economic Development, said in a statement.
The Twin Cities has fared particularly well: The Bureau of Labor Statistics reports that the area’s 3.2 percent unemployment rate is the lowest of major metropolitan areas across the country. Additionally, the region is said to be on track to meet a goal of recovering and adding 100,000 jobs by the end of 2015, which was set by economic development partnership Greater MSP.
Still, some business leaders around the state had previously expressed worries about a cooling economy this winter, citing a potential labor shortage as the unemployment rate drops.
Business groups expressed concern earlier in the year that a rising minimum wage would put a damper on job growth. But much of the recent job gains—including 92 percent of last month’s numbers—occurred in the leisure and hospitality industries, which both are comprised of many low-wage workers. The Minnesota Chamber of Commerce said it will fight to scrap the provision that automatically increases wage pegged to inflation, whichs starts in 2018.
So what’s the outlook for next year? Likely positive, if the numbers continue to play out. The National Association for Business Economics predicts faster growth and thousands of new businesses have been formed around the state. The budget also posted a $1 billion surplus—though some have warned inflation may eat into that number.