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Minnesota's strong labor market is showing no signs of cooling off and is now outperforming the rest of the country.

New data released Thursday showed the state added more jobs in October than it has in any other month this year, while its unemployment rate remains among the nation's lowest.

"Despite another tumultuous year in the global economy as we've all seen, there's every reason to believe Minnesota's economy is in a position of strength," Steve Grove, commissioner of the state Department of Employment and Economic Development (DEED), said after the latest jobs numbers came out.

While there have been a lot of headlines about layoffs coming out of Silicon Valley in recent weeks, he said Minnesota has not seen that kind of increase in job cuts. There have been only a handful of announcements from local companies.

New unemployment insurance claims in Minnesota remain low and at pre-pandemic levels. While they've ticked up a bit in recent weeks, Grove said that is typical for the state's seasonal economy with some industries, such as construction, going into winter hibernation.

The Federal Reserve has been aggressively raising interest rates to bring down high inflation, and policymakers hope to see signs that the red-hot labor market is starting to cool down. Unemployment rates are also expected to go up.

If that happens, Minnesota is better positioned than most other states because its unemployment rate remains so low. The state's jobless rate ticked up one-tenth of a percentage point in October to 2.1%, but it remains at a historically low level.

Earlier this year, Minnesota recorded the lowest state jobless rate in U.S. history at 1.8% and has remained the lowest. The U.S. unemployment rate in October was 3.7%.

While a big racial gap in unemployment persists in Minnesota, it narrowed last month as the the state's Black jobless rate came down by almost a full percentage point to 5%.

Minnesota also logged a surprisingly big jump of 17,400 jobs added last month, a 0.6% increase, outpacing the 0.2% job growth in the country as a whole.

Over the past three months and past year, Minnesota's rate of job growth has surpassed the national average, according to DEED.

However, the state has more ground to make up. Minnesota has recovered about 90% of the jobs it lost in the pandemic. By contrast, the U.S. as a whole has made a fully recovery, having surpassed pre-pandemic levels of employment several months ago.

While the U.S. economy still posts solid job gains every month, the growth has cooled a bit as the year has gone on.

In Minnesota, the monthly job numbers have been more volatile from month to month. After seeing a big spike of 17,100 jobs in July, the state added just 1,200 in August and 3,100 in September. Those figures have all been revised since they were initially reported.

October job gains were led by leisure and hospitality with 8,880 jobs, professional and business services with 4,300, manufacturing with 1,300 and education and health services with 700.

State officials said October in Minnesota was drier and warmer than normal, which may have been a factor of the increase in the arts and entertainment sector in particular.

Grove said he was surprised that the state's October jobs numbers came in so high. The state, he said, now has the tightest labor market in the country with about 3.5 job openings for every unemployed person.

"Employers have had to try so hard to use new strategies to find workers and make those connections," he said. "I think some of that is starting to finally kick into gear."

Grove pointed to nursing and residential care as an example. The sector is finally starting to see job growth as employers have made significant wage increases to attract workers.

With a 13.1% jump in wages over the year, nursing and residential care is one of several sectors in Minnesota that are seeing wages rise at a faster pace than inflation. Others include construction (up 11.6%), professional and business services (up 9.2%), and nondurable goods manufacturing (up 8.9%).

Overall average hourly earnings in Minnesota have increased at a faster rate in recent months as well. They rose 6.1% over the year in October, compared with 5.7% in September. But they're still not keeping pace with inflation, which rose by 7.7% last month.

Wages also are rising faster in Minnesota compared with the country as a whole, which saw wages rise 5.4% in last month.

At the same time as the number of jobs grew, the state's labor force participation rate ticked down one-tenth of a point in October to 68%. It was the third consecutive month the state has seen a small decline in the size of its labor force, which has about 90,000 fewer workers than before the pandemic.

The tight labor market was a big topic of conversation Thursday at the Minnesota Chamber of Commerce's economic summit in downtown Minneapolis.

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, told attendees that the number one issue he hears from small and large businesses as he travels the region is the difficulty in finding workers.

"So what happened?" he asked. "Where did the workers go?"

He offered several explanations, including the pandemic spurring more people to retire than expected, workers who died from COVID-19 as well as those who continue to struggle with long COVID, and enduring constraints of caring for children or family members.

Then he added one more to the list: lost immigration.

"Immigration has been a vital source of workers in our economy, both low-skilled workers and high-skilled workers to meet our business's needs and our economy's needs," Kashkari said. "That has really dried up in the pandemic. And we've got to address that if we really want our economy to be competitive going forward."