This week the Intelligence team is breaking down the March MSP Economic Pulse to give a taste of how we’ll be able to monitor monthly changes relative to the COVID-19 impact over the next several months.
Our region’s monthly jobs report.
Each month, GREATER MSP releases an overview of key economic indicators for the Greater MSP region that corresponds with state and federal monthly jobs reports. The MSP Economic Pulse provides a quick, but comprehensive, snapshot of how the region’s economy is performing. For anyone who tracks the national monthly jobs report from the Bureau of Labor Statistics, this report is for you. In includes an over-the-month and over-the-year look at changes to employment, including an industry breakdown and change to average earnings. It also includes changes to unemployment and the size of the labor force. We supplement the report with trends in monthly job postings to track employer hiring behavior, a good proxy for labor demand.
The MSP Economic Pulse has been a staple product from GREATER MSP for quite a while, but this latest month’s release is special because it includes a new section on COVID-19 impact that is showing up in the indicators. We knew that the March report would only scratch the surface on COVID-19 impact, and that’s because the March survey reference periods, for both the household survey of labor force status and the establishment survey of nonfarm employment, predated many COVID-19-related business and school closures that occurred in the second half of the month. Still, COVID-19 impact started to appear in the MSP region’s economic indicators.
Leisure and hospitality industry hardest hit in March, as expected.
Total nonfarm employment dropped slightly, falling by 7,995, an over-the-year decline of 0.4%. We saw a larger impact when analyzing private-sector employment, which fell by 11,508 over-the-year. This was the largest YOY decrease for private-sector employment since May 2010.
Employment in the leisure and hospitality industry sector fell by 4,200 from February, mainly in accommodations and food service. This was the largest employment loss for leisure and hospitality in MSP since March 2010. A notable decline also occurred in management of companies and enterprises (headquarters operations), which experienced its first yearly decrease in employment since December 2017. The chart below represents over-the-year changes to employment by industry sector for the 12 most recent months.
Unemployment rate increased, in MSP and nearly all peer regions.
MSP’s March unemployment rate was 3.4%, an increase of 0.3 percentage points from February’s rate, and the number of unemployed people increased by 6,314. The rising unemployment in March is likely reflecting the early effects of COVID-19 and efforts to contain it. The size of the labor force contracted by over 26,000 people from last month. People leaving the labor force represents people who are not actively seeking employment for a variety of reasons.
March unemployment rates increased from the previous month in all of MSP’s peer regions, except Portland (OR) where the rate held steady. Seattle metro had the largest unemployment rate at 5.4%, rising 2.4 percentage points over-the-month. Eight peer regions had a larger over-the-month increase in unemployment compared to the U.S. unemployment change of 0.7 percentage points. The chart below represents unemployment rate trends for a selected subset of our peer regions and the U.S. overall.
Earnings still rising, outpacing Minnesota and U.S.
Average hourly earnings in MSP were $32.38 in March, dropping four-tenths of a percent from February, but 5.9% higher than March 2019. Over-the-year earnings increases have been consistently high since September 2019, ranging from 5% to 6.8%, and continuing to remain high this month. Earnings saw similarly steady high rates of growth for Minnesota (5.3%), notably higher in MSP and Minnesota than the U.S. overall (3.7%).
Job postings slowed.
Company hiring behavior began to shift in March, reflected in the number of job postings. Monthly job postings dropped over-the-year by over 37,000, or 18.5% from March last year. Top companies for job postings have remained consistent, with Wells Fargo, Robert Half (staffing agency), Target, Oracle, and Fairview Health Services leading the region. Job posting behavior varies greatly across industries and occupations and the GREATER MSP intel team is tracking this behavior closely.
The GREATER MSP Partnership is working to support the region during this time of uncertainty and rapid change. We are committed to being a source of sound, timely information about what’s happening in our regional, national, and global economy. Our goal is to help organizations stay connected and come together even while we’re forced to work apart. To do so, we are identifying new problems and developing smart, fast solutions through both new and strengthened partnerships. Click here to see more timely research and insights from the GREATER MSP Intelligence team and eye-opening conversations with local leaders.
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