Quarterly economic snapshot – Minnesota’s economic performance mid-year 2022

Minnesota’s economy showed mixed signals in the first half of 2022, with some indicators demonstrating continued economic stability and others showing signs of cooling. Read more here, as we break down key economic indicators at the mid-year point of 2022. 

Highlights:

• Minnesota’s real GDP contracted by -2.0% in the first quarter of 2022 after experiencing six consecutive quarters of growth. Real GDP declined in 46 of 50 states in the first quarter, with U.S. real GDP falling by -1.6%. Minnesota GDP remains 1.0% above pre-pandemic peak levels, ranking 24th best among all states.

• Minnesota exports grew by 13% in the first quarter of 2022 compared to the first quarter of 2021, trailing the U.S. growth rate of 18%. Exports to Canada alone were valued at $1.93 billion, a 35% increase from Q1 2021.

• New business applications remain high through June of 2022, though they have fallen slightly from 2021 levels. Total applications from January-June 2022 remain 47% higher than the sixteen-year average from 2005-2020. This continues the pandemic-era trend of elevated business formation activity.

• Total nonfarm payroll employment continued its recovery from the pandemic-downturn in 2020, reaching 2,944,800 jobs on a seasonally adjusted basis in July 2022. Total employment expanded by 19,100 jobs in July and grew 2.4% year-over-year. As of July 2022, Minnesota remained 60,900 payroll jobs below pre-pandemic levels.

• Minnesota’s unemployment rate once again reached a new record low of 1.8% in June 2022 and held steady in July. Minnesota has lowest unemployment rate of any state in the U.S. since the data series began in 1976.  

• Labor Force Participation Rate (which measures the share of adults 16 and older who are working or actively looking for work) fell in July, after experiencing six consecutive month of workforce participation gains. Minnesota still has 76,796 fewer workers in the labor force (either employed or actively seeking employment) compared to January 2020 levels. 

• U.S. inflation continued to rise in the second quarter but eased slightly in July, with prices sitting 8.5% higher than a year prior in July 2021. The combination of rising prices, hiring challenges, and fears of a recession have dampened business confidence to the lowest levels since the pandemic’s beginning.

Grow Minnesota! – Tools and resources for Minnesota businesses

Below is a round-up of articles and reports to understand economic trends and access key resources to grow and expand in Minnesota.