Minnesota's job engine stalled in January

State's unemployment rate tops U.S. level for first time since 2007 as job growth slows and some sectors shed positions

Apr. 3, 2026 at 9:38pm

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An abstract composition of overlapping triangles and rectangles in shades of blue, green, and red, conveying the concept of a stalling job market through minimalist geometric shapes without any text or identifiable elements.A geometric visualization of Minnesota's slowing job growth and rising unemployment, signaling broader economic challenges.Minneapolis Today

Minnesota's unemployment rate rose to 4.4% in January, surpassing the national rate of 4.3% for the first time since 2007. The state's job growth has slowed, with the Minneapolis-St. Paul metro area losing nearly 2,000 jobs in January, a 0.1% drop from a year earlier. Officials cite potential impacts from federal immigration enforcement actions as a contributing factor to the weakening labor market.

Why it matters

Minnesota's economy has long been a bright spot, with strong job growth and low unemployment. The reversal of this trend, with the state's jobless rate now exceeding the national level, raises concerns about a broader slowdown and the potential impact of federal policies on the state's workforce.

The details

According to data from the Minnesota Department of Employment and Economic Development, the state's unemployment rate ticked up to 4.4% in January on a seasonally adjusted basis, the first time it has exceeded the national rate of 4.3% since May 2007. Officials cited a notable deceleration in the American economy over the past year, with the Minneapolis-St. Paul metro area shedding almost 2,000 jobs, a 0.1% drop compared to a year earlier. DEED Commissioner Matt Varilek suggested the federal government's immigration enforcement actions may have contributed to the negative job numbers, noting fewer job seekers came to the state's CareerForce centers in Minneapolis, which are located near areas with high ICE activity.

  • Minnesota's unemployment rate topped the national rate in January 2026.
  • The Minneapolis-St. Paul metro area lost almost 2,000 jobs in January 2026 compared to a year earlier.

The players

Matt Varilek

Commissioner of the Minnesota Department of Employment and Economic Development.

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What they’re saying

“All of these annual job figures reflect a very notable deceleration in the American economy over the last year, and to the extent that federal actions related to immigration and tariffs have contributed to this, I think it's very fair to say Minnesota has borne more than its share of those impacts.”

— Matt Varilek, DEED Commissioner

The takeaway

Minnesota's economic strength has been a point of pride, but the state's rising unemployment rate and slowing job growth are worrying signs that federal policies may be taking a toll on the state's labor market. This raises questions about the broader health of the economy and the potential need for targeted measures to support workers and businesses in Minnesota.