After a few months of extensive review of their process for producing coincident and leading indices, the Philadelphia Federal Reserve Bank has published revised indices for all 50 states. The Minnesota Index, which had previously been reported as flat in December, was revised upwards, starting a four month upswing. March’s 0.3 percent increase, the second straight month of 0.3 percent increases, indicates that the Minnesota economy, after slowing during the second half of 2014, is again picking up steam. Minnesota’s index lagged behind the U.S. index for most of the last half of 2014 but has outpaced the U.S. index over the last two months.
Minnesota has recorded solid wage and salary employment growth over the past two months which has boosted the index, but the unemployment rate has been stuck at 3.7 for eight months. Slow job growth was the reason for the flat unemployment rate during the second half of last year. The 3.7 percent pause in the unemployment rate over the last couple of months can be traced to positive developments. Minnesota’s labor force growth has accelerated over the last few months, recording monthly increases not seen since 2009. The state’s labor force surpassed 3 million for the first time ever in both February and March. Solid job growth combined with an uptick in labor force growth is a welcome development.