Minnesota's official unemployment rate is a useful indicator of the health of the state's economy, but it does not tell the whole story. We can get a more complete picture of Minnesota's labor market by looking at alternative measures of unemployment and by providing the rates by age, gender, and race. The numbers below come from the Current Population Survey.
Use these estimates with caution. The Current Population Survey, which produces these data, has a sample size of only 900 households in Minnesota making it too small to publish monthly estimates for subpopulations. This report uses the BLS unpublished 12-month moving averages. Rolling together 12 months of data is the most reliable method of publishing estimates for subpopulations in Minnesota but means that turning points in the data lag by six months. Moreover, even rolling 12 months of data together results in high standard errors on the estimates, reliability issues, and limitations on which demographic groups can have labor force estimates published. Essentially, the data provided in this report should be viewed as indicators rather than as reliable estimates.
The Bureau of Labor Statistics has developed alternative definitions of unemployment and underemployment (see Table 1). The official unemployment measure, called U-3, is the share of those aged 16 and over who, at the time of the monthly survey, were not employed in the past week and who looked for work sometime in the past four weeks. U-3 excludes anyone who was not seeking work in the past month unless they were temporarily unemployed and have a date by which they will return to the same employer. This group, those not seeking work, is considered not in the labor force. Note that the U-3 number reported in this analysis will differ from the official state unemployment estimate because it is based on a 12-month moving average.
The U-4 adds people who want a job but aren't actively searching because they think there are no jobs available that fit their qualifications, also known as discouraged workers, to the count. Discouraged workers are those who have looked for work in the past year but stopped looking in the past month because they think they cannot find a job.
U-5 adds all the other "marginally attached" workers, people who looked for work sometime in the past 12 months but, for reasons other than discouragement, did not look in the past four weeks, to the count of unemployed.
The broadest measure of unemployment, U-6, includes all the above and adds people who are employed part-time but want full-time work.
Table 1. Alternative Unemployment Rates, Minnesota, 12-month Moving Average
| Measure* | August 2023 | July 2023 | August 2022 | Monthly Change | Annual Change |
|---|---|---|---|---|---|
| U-3 | 3.0% | 3.0% | 2.8% | 0.0% | 0.2% |
| U-4 | 3.1% | 3.1% | 2.9% | 0.0% | 0.2% |
| U-5 | 3.9% | 3.9% | 3.6% | 0.0% | 0.3% |
| U-6 | 5.3% | 5.3% | 5.1% | 0.0% | 0.2% |
| Number of Discouraged Workers | 3,500 | 4,200 | 4,200 | -700 | -700 |
| Number of Involuntary Part-Time Workers | 44,100 | 45,500 | 46,500 | -1,400 | -2,400 |
*Definitions of Measures:
Long-term unemployment—lasting more than 27 weeks —imposes costs on people that go well beyond lost wages, including lower future earnings.
Table 2. Long-term Unemployment, Minnesota, 12-month Moving Average
| Measure* | August 2023 | July 2023 | August 2022 | Monthly Change | Annual Change |
|---|---|---|---|---|---|
| Number Long-Term | 9,000 | 8,900 | 14,200 | 100 | -5,200 |
| Share Long-Term | 9.7% | 9.7% | 16.4% | 0.0% | -6.7% |
| Median Duration of Unemployment (weeks) | 7.6 | 7.7 | 8.3 | -0.1 | -0.7 |
*Long term is defined as more than 27 weeks. The share of long term is expressed as a percentage of all unemployed (U-3).
The labor force participation rate for Black Minnesotans rose to 75.5% in August, which is 8.7 points higher than one year ago and well above the labor force participation rate for white Minnesotans. The employment to population ratio rose to 73.7%, up from 62.5% a year ago. The unemployment rate dropped to 2.4% in August and is down 4.2 points from a year ago.
The labor force participation rate for Hispanic Minnesotans dropped to 73.1% in August, down 7.3 points over the year. The employment to population ratio dropped to 68.6% in August and was down 8.9 points from one year ago. The unemployment rate remained at 6.2% in August and was up 2.6 points over the year.
The labor force participation rate for white Minnesotans fell to 67.3% in August, down 1.3 points over the year. The employment to population ratio fell to 65.3% which is 1.7 points lower than last year. Unemployment rose to 3.0% in August up 0.7 points over the year.
Note: Due to the small sample size for Black and Hispanic workers in the Current Population Survey, the unemployment estimate and unemployment rate are subject to high volatility for these groups. The unemployment rate is valuable and meaningful when examined as a long term trend, not month-by-month.
The labor force participation rate for Native American Minnesotans was 60.3% in 2021 compared to 68.4% for the total population aged 16 and older. The employment to population ratio for Native American Minnesotans was 53.9% compared to 65.0% for the total population, and the unemployment rate was 10.5% compared to 4.9% for the total population. These are annual data from the 2021 American Community Survey 1-year estimates and are not comparable to the numbers elsewhere in this article.
The labor force participation rate for women rose to 64.5% in August, which was up 0.7 points from one year ago. The employment to population ratio remained at 62.9% and was up 0.8 points from one year ago. The unemployment rate remained level at 2.5% in August and was down 0.2 points over the year.
The labor force participation rate for men remained at 71.5% which is 1.7 points lower than one year ago. The employment to population ticked up slightly to 69% and was down 2.1 points from one year ago. The unemployment rate remained at 3.5% in August and was up 0.6 points over the year.
Table 6. Labor Force Indicators by Gender, Minnesota, 12-month Moving Average
| Month/Year | Labor force participation rate | Employment to population ratio | Unemployment rate | |||
|---|---|---|---|---|---|---|
| Female | Male | Female | Male | Female | Male | |
| August 2023 | 64.5% | 71.5% | 62.9% | 69.0% | 2.5% | 3.5% |
| July 2023 | 64.4% | 71.3% | 62.9% | 68.9% | 2.5% | 3.5% |
| August 2022 | 63.8% | 73.2% | 62.1% | 71.1% | 2.7% | 2.9% |
| Monthly change | 0.1% | 0.2% | 0.0% | 0.1% | 0.0% | 0.0% |
| Annual change | 0.7% | -1.7% | 0.8% | -2.1% | -0.2% | 0.6% |
The teen (age 16-19) unemployment rate was 7.5% in August, up 1.4 points over the year. The labor force participation rate rose to 56.7% and the employment to population ratio rose to 52.5%.
Note: Due to the small sample size for teen workers in the Current Population Survey, the unemployment estimate and unemployment rate are subject to high volatility. The unemployment rate is valuable and meaningful when examined as a long term trend, not month-by-month.
