State job report shows Twin Cities losing ground
Minnesota’s January 2026 jobs report from DEED shows unemployment ticking up to 4.4% and essentially flat job growth, with the Twin Cities metro losing nearly 2,000 jobs and seeing labor‑force participation slip. Over the past year, the state added just 13,147 payroll jobs (0.4%), but between December and January the private sector actually shed 900 jobs even as government, education and health services, and construction eked out gains. Leisure and hospitality, trade/transportation/utilities, and financial activities all lost ground, while Minnesota’s overall labor force shrank by 4,562 people and participation dropped to 68.2%. DEED officials bluntly tie the weakness to nearly a year of economic “turbulence,” blaming erratic tariffs and a radical shift in immigration policy that they say have hit Minnesota — and especially early‑2026 Twin Cities employers — harder than most states. For metro residents, this isn’t abstract macroeconomics: it’s a warning that the job market they’ve relied on for decades is softening, with national policy shocks now visible in local pink slips and a quieter hiring board.
📌 Key Facts
- Minnesota’s unemployment rate rose to 4.4% in January 2026 while the national rate dipped to 4.3%.
- The state added only 13,147 payroll jobs over the past year (0.4%), and the private sector lost 900 jobs between December and January on a seasonally adjusted basis.
- The Twin Cities area lost nearly 2,000 jobs in January, and Minnesota’s labor force shrank by 4,562 people as participation slipped to 68.2%.
📊 Relevant Data
From 2020 to 2024, immigration accounted for 94 percent of Minnesota's net population growth, driving labor force expansion amid an aging native-born population.
New Americans Drive Minnesota's Population Growth and Labor Force — Minnesota Women's Press
Foreign-born workers account for almost 11% of Minnesota's labor force, with a higher employment rate than their population share (11.0% of jobs vs. 10.1% of working-age population).
What percent of jobs in Minnesota are held by immigrants? — USAFacts
Immigrants contribute to key sectors in Minnesota, including 20% of the construction industry, 38% of agriculture, 19% of manufacturing, and 18% of business services in MN-5.
Immigrants Make MN-5 Stronger — FWD.us
Undocumented immigrants make up 7 percent of all workers in Minnesota's leisure and hospitality sector.
The Economic and Fiscal Impacts of Mass Deportation — Minnesota Budget Project
Minnesota's immigrant business owners and workers generate $41 billion in economic output each year.
NEWS: The Mark of Operation Metro Surge on Minnesota's Workforce and Economy — Minnesota Women's Press
Operation Metro Surge, an ICE enforcement action, caused $203.1 million in economic damage in Minneapolis and $106 million elsewhere in Minnesota, disrupting sectors like restaurants, hotels, and retail through workforce destabilization and reduced customer traffic.
Measuring the economic damage of Minnesota's ICE surge is hard — Minnesota Reformer
Workers of color now drive employment growth in Minnesota as the White workforce ages, marking a demographic shift post-pandemic.
Minnesota's Workforce Since the Pandemic: More Diverse, More Experienced — Minnesota Department of Employment and Economic Development
📰 Source Timeline (1)
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