The U.S. jobless rate went on a wild roller coaster ride at the start of the COVID-19 pandemic. The unemployment rate in February 2020 was near a four decade low at 3.5%. That surged to 14.7% in April. It has taken until the last two months for the economy to make up for all those lost jobs. The August 2022 national figure was 3.7%.
The BLS has just released its STATE EMPLOYMENT AND UNEMPLOYMENT — AUGUST 2022. Very few states posted changes compared with the previous month. “Nonfarm payroll employment increased in 10 states, decreased in 1 state, and was essentially unchanged in 39 states and the District of Columbia in August 2022.”
The jobless rates did vary considerably from state to state. States with the lowest jobless rate tended to be in the Plains states and Northeast. The lowest rate was in Minnesota at 1.9%. The rate in Nebraska and Vermont was 2.1% and in 2% in Utah and New Hampshire.
Only 58,240 people are out of work in Minnesota. That is against a workforce of 3,023,110. Many of the out of work people are between jobs, and are likely to be employed soon. Across America there are millions of jobs that have not been filled.
The primary disadvantage to such low employment is that it tends to fuel inflation. A job market with so few people out of work means that the consumer population in America is at or near all-time high. This means millions of more consumers than the economy had in early 2020. These consumers drive spending, which drives GDP, which drives unprecedented demand for products and services.
The answer to the question of how inflation can be brought under control is higher interest rates according to most economists and central banks. This, in turn, tightens many business margins. And, tightened business margins often lead to layoffs. Famous economist and former Treasury Secretary Larry Summers believes the jobless rate may need to reach 7.5% for inflation to be under control.
Whether Summers is right is a matter of debate. What is not up for argument is that virtually everyone in Minnesota has a job.
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