(KNSI) – Minnesota’s job market hit a rough patch mid-summer, according to a report released on Thursday.

The Minnesota Department of Employment and Economic Development says the state lost 4,000 jobs in July. Even more concerning, the unemployment rate surged by 0.2% to 3.5%, the highest level since the COVID-19 pandemic.

Another red flag regarding the job market is the number of people who have given up finding a job because the hiring market has become softer in recent months. DEED notes the labor force participation rate ticked down to 68.1%.

DEED Commissioner Matt Varilek says the results are likely a direct result of President Donald Trump’s policies in Washington, D.C. “We may now be seeing results of mass federal layoffs and funding interruptions, erratic tariffs and shrinking immigration. He added a more positive spin, “Even so, some of the favorable qualities about Minnesota’s labor market remained consistent in July, with low unemployment, significant wage growth and high labor force participation.”

Job growth was seen in construction and education and health services. Government led the way in terms of decreases, shedding 1.2% of jobs.

Locally, St. Cloud is the only metro area in the state to have experienced job losses over the past year. On a non-seasonally adjusted basis, St. Cloud payrolls have shrunk by 69 jobs, a 0.1% contraction. Rochester and Mankato are doing the best at 5.9% and 5.3% growth, respectfully. The Twin Cities, Duluth, and Moorhead job markets have all grown by less than 1%.

___

Copyright 2025 Leighton Media. All rights reserved. This material may not be broadcast, published, redistributed, or rewritten, in any way without consent.