This Minnesota city has the lowest unemployment rate for any metro in U.S.

Mankato has the lowest unemployment of any city in the country — and is one of six cities in or around the state that were among the top 20 cities this fall.

At a very low 1.3%, Mankato topped the US Bureau of Labor Statistics’ list of metro areas with the lowest unemployment rates for September. October figures will be released next week.

The entire state of Minnesota posted a 2.1% unemployment rate for October, tying Utah for the top statewide rate. Minnesota held onto the top spot for a month after posting the lowest U.S. unemployment rate in U.S. history at 1.8% in June.

The low rates are driven by strong hiring since the coronavirus pandemic was brought under control and a shrinking overall workforce. The state’s workforce of more than 3 million is still about 90,000 fewer workers than it was before the pandemic.

Labor experts have pointed to accelerated retirements among the state’s aging population and the ongoing challenges of caring for children or the elderly as some of the reasons why some workers have not returned to the workforce.

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With an unemployment rate of 1.5% in September, Rochester was tied for the fourth lowest unemployment rate in the US with Sioux Falls, SD and Jefferson City, Mo. St. Cloud ranked 11th with an unemployment rate of 1.7%.

The Twin Cities also made the list. With an unemployment rate of 1.9%, it ranked 19th in six points.

Fargo (1.4%) and Grand Forks (1.6%) — cities in neighboring North Dakota whose metropolitan regions include cities in Minnesota — also made the top 10.

So what is going on in these Minnesota cities that has brought their unemployment rates down so low?

“We know Rochester has a strong health care sector,” Alicia Cordes-Mayo, spokeswoman for the Minnesota Department of Employment and Economic Development, wrote in an email. “And Mankato and St. Cloud have universities and significant manufacturing opportunities.”

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All these elements can contribute to the low unemployment rate, she added.

Healthcare and manufacturing, of course, are some of the industries that feel the most about labor shortages.

Mankato has always had a very low unemployment rate — often below 3% during the busiest times of the year — and a very high labor force participation rate, said Ryan Vesey, manager of economic development and research for Greater Mankato Growth, the region’s chamber of commerce. .

But 1.3% is tied for the lowest ever, he said.

Vesey said employers in Mankato are finding workers harder, hiring more people with disabilities or those reintegrating after incarceration, and are more welcoming to immigrants. He cited one recent example where a manufacturer set up foot washing stations and prayer rooms for East African workers.

Employers are also looking to automation and robotics to help fill the gaps, he said.

“I think sometimes people look at low unemployment and say, it’s really hard to be an employer right now,” Vesey said. “But sometimes I forget that unemployment is so low that businesses are doing extremely well. Otherwise they wouldn’t need all these people.”

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Sean O’Neil, director of economic research for the Minnesota Chamber of Commerce, noted that Minnesota often has a much lower unemployment rate than the U.S. as a whole. In October, the unemployment rate in the US was 3.7%.

He said the gap between the two is now about the same as it has been for the past several decades, since the federal government began tracking the state’s unemployment rate in 1976.

But during the pandemic, Minnesota has lost more people from its workforce than some other states that also have low unemployment rates, he said.

“And we haven’t seen a big recovery for those workers,” O’Neil said. “So that’s a compounding factor that’s contributing to these really historically low unemployment rates.”

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