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MINNEAPOLIMEDIA NEWS | MINNESOTA JOB GROWTH STALLS AS UNEMPLOYMENT RISES TO 4.4 PERCENT
SAINT PAUL, MN (September 19, 2026). Minnesota’s employment growth was effectively flat in August as the state’s unemployment rate increased to 4.4 percent and participation in the labor force continued to decline.
The new figures from the Minnesota Department of Employment and Economic Development present a mixed picture. Minnesota continues to show stronger employment growth than the nation over the full year, but the latest monthly numbers indicate that momentum has slowed.
Minnesota’s unemployment rate is now level with the national rate of 4.4 percent.
The state’s labor-force participation rate fell to 66.9 percent in August. It stood at 68.1 percent one year earlier and has declined during every month of 2026.
Labor-force participation measures the share of working-age residents who are employed or actively seeking employment. A continuing decline can reflect retirements, population aging, caregiving responsibilities, discouragement among job seekers and barriers preventing people from entering or remaining in the workforce.
DEED Commissioner Matt Varilek pointed to Minnesota’s aging population and a decline in the arrival of new workers. He also connected the trend to the effects of intensified immigration enforcement earlier this year.
Despite the weak monthly performance, Minnesota added more than 45,000 jobs over the previous 12 months, representing growth of approximately 1.5 percent. National employment increased by approximately 0.3 percent over the same period.
Minnesota also reported a 14 percent increase in the value of exports during the second quarter compared with the same quarter in 2025. Canada remained the state’s largest export market, while Costa Rica entered Minnesota’s 10 largest export destinations after increased shipments of optical and medical products.
The export growth offers some protection against weakness in other parts of the economy, but businesses remain exposed to changes in tariffs, international demand and trade policy.
The combination of flat monthly hiring, higher unemployment and falling workforce participation will be important for state budget projections, employer recruitment and workforce-development planning across the Twin Cities and Greater Minnesota.
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