Flattening the wrong curve
By Sean O'Neil
Director, Economic Research
Data provided by the Minnesota Chamber Foundation’s Center for Economic Research
Minnesota’s economic recovery forged ahead in July but at a slowing pace. This is a step in the right direction, but we’d like to see stronger movement towards recovery.
Key takeaways from the Minnesota Chamber’s Dashboard for Economic Recovery include:
- Leisure and hospitality jobs made strong gains in July
- Minnesota’s unemployment rate fell, improving Minnesota near the middle of all states at 18th
- New business filings continue to skyrocket
The July jobs report released by DEED shows that Minnesota added back another 32,500 jobs on a seasonally adjusted basis but grew at only a 0.3% rate in real terms. Gains were strongest in the sectors hardest hit in March and April, with leisure and hospitality leading the way at 9.8% growth and other services following at 2.9% growth (seasonally adjusted).
Of Minnesota’s four most concentrated industries, Management of Companies and Enterprises (i.e. corporate headquarters) grew fastest at 1.2%, followed by Health Care and Social Assistance (0.8%), Manufacturing (0.3%), and Finance and Insurance (0.2%). While these industries did not fall as far this spring, they have also not bounced back as quickly this summer.
Unemployment numbers were slightly more encouraging. Minnesota’s official unemployment rate fell to 7.4%, improving from 22nd to 18th lowest among states. However, unemployment continues to vary widely across regions, with the mining/tourism/health care oriented economy of Northeast Minnesota experiencing jobless rates nearly twice as high as the agriculture/manufacturing oriented economies in Southwest Minnesota.
Other indicators such as new job postings and time clock data from When I Work suggest a continued trajectory of modest growth into August. The dashboard shows that new job postings rose over steadily the first week of August but then slid backwards the rest of the month. While this does not necessary reflect actual hiring trends, it suggests that the August jobs report may look somewhat similar to July.
More positively, a couple of bright spots in Minnesota’s recovery dashboard seem to have gotten brighter last month. After rising above 2019 levels in June, new business filings spiked even further in July with 7,855 new businesses handing in their paperwork.
A number of important questions remain unanswered as we head into the fall months. Minnesota, like everyone else, is in the unfortunate situation of having to improvise through an unprecedented crisis. Each step is an educated guess at how the complex interactions across society will impact the path of COVID-19, and how that path will in turn provoke further changes in social and economic behavior. This fall brings significant to new factors into play: namely the beginning of the school year and entrance into cold and flu season. Our attention will be fixed on what these changes mean for COVID-19 case rates and thus for Minnesota’s economic recovery. The Minnesota Chamber Foundation will continue to track these trends over the next month and look for additional evidence of recovery along the way.
Chamber Foundation online dashboard offers real-time updates
The Minnesota Chamber Foundation economic dashboard is, aimed at providing real-time updates on Minnesota’s economy as the state begins to recover from the shock of COVID-19. This online portal offers indicators and analysis of employment and income, business recovery and consumer and business spending.