April employment saw record-breaking job losses in MSP.
The COVID-19 pandemic has resulted in the largest economic shock to our regional economy with the largest over-the-month and over-the-year decrease in employment on record since 1990, the earliest year data is available. Total employment in April dropped over 230,000, falling to 1.74 million from March (-11.8%) and an over-the-year drop of 13.4%.
Leisure & Hospitality was the hardest hit industry sector, as expected. Employment in this sector, which includes arts, entertainment, recreation, accommodations, and food services, dropped 54% from 177,652 in March to 82,414 in April. Within this industry sector, employment at full-service restaurants dropped 74.1% from 60,098 in March to 16,671 in April. Nearly all industries experienced employment declines from March to April, though there was modest employment growth in residential building construction, nondurable goods wholesale trade, and credit intermediation (all 1% or lower).
MSP’s unemployment rate surpassed the peak rate during the Great Recession.
MSP’s total labor force dropped from 2,019,216 million to 1,993,021 million (-26,165) from last month. This is the first time the region’s labor force was below two million since December 2017. The number of people who are unemployed increased to 183,882, a nearly 200% jump from last month (62,817), adding 121,065 people to the pool of workers who are unemployed and actively seeking work.
MSP’s unemployment rate jumped to 9.2%. This rate is higher than the Minnesota unemployment rate of 8.6%, and lower than the national rate of 14.4% (April). This is the highest metro monthly unemployment rate since data was available, and higher than the peak unemployment rate during the Great Recession, which was 8.3% in March 2010. While the region’s unemployment rate is historically higher, the rate is lower than all of our peer regions. Boston’s unemployment was the highest at 15.4% an increase of 12.7 percentage points from March 2020 of 2.7%.
Source: MN DEED, Local Area Unemployment Statistics
Average hourly earnings are up but the increase should be interpreted with caution.
Average hourly private-sector earnings saw a 3% jump from March and a 7.2% increase over-the-year. Average earnings increased in MSP, Minnesota, and the U.S. overall at a similarly high rate from April 2019 (MN: 6.7%; US: 7.9%). The notably high wage growth experienced in MSP from March to April should be interpreted with caution. While some workers experienced an increase in pay in April, the increase in average hourly earnings reflects the disproportionate number of lower-paid workers who went off payrolls. Their removal put upward pressure on the average hourly earnings estimate.
Average earnings by industry are only available for production workers (nonsupervisory employees) but show that most major sectors experienced wage growth in MSP, except for accommodation and food services.
Job Postings
MSP regional employers posted 130,762 unique job postings in April 2020, an over-the-year decrease of 70,685 postings (-35%). After San Francisco, MSP had the largest decrease in job postings from March to April among our peers, dropping 20%. Job posting activity is an indicator of labor demand.
