Minnesota adds jobs while ticking down its state unemployment rate, though the positive trend is tempered by a continued slide in the number of residents actively looking for work. According to the latest DEED report released by the Minnesota Department of Employment and Economic Development, the state successfully added 5,400 nonfarm payroll positions throughout May 2026, marking a 0.2% monthly increase. This regional growth outpaced national nonfarm job creation, which rose by just 0.1% over the same thirty-day period. Concurrently, the headline unemployment rate fell by one-tenth of a percentage point to settle at 4.4%, narrowing the gap with the stable 4.3% national average.
The growth within the state’s private sector was led heavily by seasonal warm-weather hiring, with private employers expanding payrolls by 5,900 net positions. According to the state’s detailed breakdown, six distinct supersectors recorded positive expansions, topped by the leisure and hospitality industry, which added 2,400 jobs. The construction sector followed closely behind with an addition of 2,100 positions. Conversely, the financial activities sector experienced the sharpest downturn of the month, shedding roughly 2,400 positions. DEED Deputy Commissioner Kevin McKinnon described the overall numbers as encouraging progress, emphasizing that the state has successfully built momentum following a stagnant winter stretch.
However, state officials noted that the falling unemployment rate is a mixed bag, driven partly by residents dropping out of the job market altogether. Angelina Nguyễn, director of Minnesota’s Labor Market Information office, explained that the drop is a mix of people landing jobs and others leaving the workforce, making it difficult to isolate exactly how much each factor is steering the metric. The state’s labor force participation rate fell two-tenths of a percentage point to 67.2% in May, marking the sixth consecutive month of labor force declines. While this contraction is a broader nationwide trend, Nguyễn noted that Minnesota is experiencing a faster rate of decrease than the rest of the country, even though the state’s overall worker engagement remains substantially higher than the national baseline of 61.8%.
