Mpls. Fed forecasts strong 2013 job growthby Annie Baxter, Minnesota Public Radio
ST. PAUL, Minn. — Minnesota is poised for stronger employment growth in 2013, according to a forecast from the Federal Reserve Bank of Minneapolis.
The bank's economists expect job growth of 2.2 percent in Minnesota this year. That's higher than the historical average growth rate of 1.4 percent.
The forecast is based on statistical models. But the Fed also polled business leaders about hiring. Fed economist Rob Grunewald said even though employers are slightly less optimistic this year than they were in 2012, they still plan on increasing payrolls.
"The Twin Cities and Greater Minnesota are both expecting growth in 2013 in employment — stronger optimism for employment growth in the Twin Cities relative to Greater Minnesota," Grunewald said.
Retail and manufacturing employers expect the largest increases in employment at their companies.
The Fed expects Minnesota's unemployment rate to drop to 4.7 percent by the end of the year. It's currently 5.7 percent.
The Fed also projects moderate wage growth of 3 percent or lower. Meanwhile, the bank expects that personal income — which includes income sources beyond wages such as dividends, government transfers, and rents — will grow more than 5 percent.
The Fed's statistical model does not incorporate U.S. fiscal policy decisions. And the poll of business leaders and manufacturers was conducted the day after the election, when the fiscal cliff worries still ran high. Grunewald said business leaders' confidence may be higher now as a result of the federal budget deal reached this week.
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