Minnesota's unemployment rate stayed steady at 4.5 percent in March, which officials say is a good sign. But fewer people are actively looking for jobs.
The state added 800 jobs on a seasonally-adjusted basis between February and March, which was essentially no growth, according to a new report from the Minnesota Department of Employment and Economic Development. That’s following a decline of 6,100 jobs in February.
But the percentage of people that either have a job or are actively looking for one, known as the labor force participation rate, ticked down last month to 67.6 percent. The labor force participation rate was still higher than the nation’s, but DEED officials say the drop in March was “bigger than usual.”
DEED Commissioner Matt Varilek said the shifts can’t be attributed to any single factor, but the state is still recovering from this year’s surge in immigration enforcement.
“I'm pleased to see some initial signs of stabilization in both the unemployment and jobs numbers,” Varilek said. “I continue to believe there's a long road of recovery yet ahead of us with regard to jobs.”
Businesses are also dealing with rising energy costs from the Iran war, uncertainty around tariffs and an aging workforce, said Angelina Nguyễn, director of DEED’s Labor Market Information Office.
“I don't see companies jumping to expand their operations or hire aggressively,” she said. “And some sectors are more affected than others.”
Changes in employment were mixed across the state's “supersectors” — five gained jobs and five lost jobs between February and March, while one, the mining and logging sector, had no change.
The professional and business services sector added the most jobs, 1,600, up 0.4 percent, and construction gained 1,100 jobs, up 0.8 percent.
Minnesota's leisure and hospitality sector saw its third consecutive month of job losses in March, dropping 0.8 percent.
“We still have a relatively difficult national economic environment, which does present a challenge for us as we are trying to pull ourselves out of the situation caused by Operation Metro Surge,” he said.
Job growth in Minnesota increased on an annual basis, with payrolls growing by about 9,000 jobs or 0.3 percent between March 2025 and last month.
