Minnesota’s labor market indicators in July reflected a slight cooling, consistent with broader national trends, according to the latest data released by the Department of Employment and Economic Development (DEED).
The state recorded a net loss of 4,400 jobs over the month, and the unemployment rate rose by 0.2 percentage points to 3.5%. The labor force shrank by approximately 1,700 individuals, bringing the labor force participation rate down to 68.1%, a decrease of 0.1 percentage points.
Despite these monthly declines, Minnesota’s year-over-year job growth outpaced national averages. The state added 35,275 jobs since July 2024, representing a 1.2% increase. Private sector employment grew by nearly 29,200 jobs, or 1.1%, compared to national growth rates of 0.9% overall and 1.0% in the private sector.
DEED Commissioner Matt Varilek noted that broader economic factors may be influencing the labor market, including federal layoffs, changes in funding, tariff fluctuations, and immigration trends. However, he emphasized that Minnesota continues to show strengths in areas such as wage growth and labor force participation.
Average hourly earnings for private sector workers in Minnesota rose by 99 cents in July to $40.09. Compared to July 2024, wages increased by $2.44, marking a 6.5% annual growth rate. Nationally, private sector wages declined by 4 cents over the month and rose 3.8% year-over-year. The Consumer Price Index (CPI) for all urban consumers increased 2.7% over the same period.
Job gains in July were concentrated in two supersectors:
- Education and Health Services: +5,400 jobs (+0.9%)
- Construction: +1,200 jobs (+0.9%)
Eight supersectors experienced job losses, including:
- Government: −3,500 jobs (−1.2%)
- Professional & Business Services: −2,300 jobs (−0.6%)
- Trade, Transportation and Utilities: −2,100 jobs (−0.4%)
“There are some signs of the job market slowing down, but Minnesota’s economy remains stable,” said Angelina Nguyen, DEED’s Labor Market Information Director. “While certain indicators such as labor force size and unemployment shifted downward, others—like year-over-year job growth and wage increases—remain steady.”
Nationally, the unemployment rate stood at 4.2% in July, with a labor force participation rate of 62.2%.
