Federal Reserve Bank of Minneapolis

Summary of Economic Activity

The Ninth District economy grew slightly since the previous report. Employment grew slightly, and labor demand was softer. Price pressures increased, while wage pressures were moderate and continued to ease. Business survey respondents reported that demand increased on balance. Commercial and residential construction improved slightly, consumer spending was mostly flat, while manufacturing slowed modestly. Agricultural conditions were steady at low levels. Activity among minority- and women-owned business enterprises was mixed.

Labor Markets

Employment grew slightly since the last report. Recent surveys suggested that hiring sentiment continued to soften modestly but remained positive overall. Staffing contacts reported slower, but variable, demand for workers; demand for entry-level, low-skill jobs had softened in North Dakota, but demand for skilled and professional workers was still healthy. In Montana, job orders from manufacturers were lower. In Michigan's Upper Peninsula, demand for permanent, full-time jobs slowed, but rose for temporary and seasonal positions. A Wisconsin staffing contact said the current job market was more unpredictable than it ever has been, with some businesses slowing while others were "ramping up out of nowhere." Labor availability continued to improve. A Minnesota contact said businesses were "reporting less ghosting and more applicants following through with the hiring process." Traffic was also higher at job fairs and workforce offices.

Wage increases were moderate overall, but were easing compared with previous levels, according to recent surveys. Staffing contacts said wage pressures were easing, but still evident in high-demand jobs. In Montana, trade workers saw strong wage increases in recent contract settlements, while public unions saw 2 to 4 percent raises. A Wisconsin manufacturer said that "wage competition has moved from a hard boil to a gentle simmer. It's not the factor that it was 12 to 18 months ago."


Prices increased moderately since the last report, which was a slight uptick in the pace of growth. While most respondents to a District business conditions survey reported no change to prices charged in March from a month earlier, more than a third said prices increased. Input price pressures remained greater than final price pressures. A professional services firm indicated that it was approaching a limit in its ability to pass on labor cost increases because customers were pushing back on pricing. Retail fuel prices in District states increased briskly since the previous report. Prices received by farmers increased in February from a year earlier for chickpeas, lentils, chickens, eggs, milk, hogs, and cattle; prices decreased from a year earlier for corn, wheat, soybeans, potatoes, canola, and turkeys.

Worker Experience

Respondents to a recent survey of workers, most of whom were employed in social services, were overall satisfied with their work schedule flexibility. About one-third expressed dissatisfaction with their pay. Some were advocating for better pay, working toward a promotion, or looking for another job. Most of those looking for jobs were likely to reject an offer if the pay was insufficient to meet their needs. Many respondents reported experiencing notably high prices in groceries, food away from home, rent, fuel, and electricity. As the health care industry continued to add jobs across most of the District, traveling nurses were reportedly becoming less common, but their "optimism in the job market remains high," said a labor contact. They were said to be receiving attractive sign-on bonus offers from nursing homes, a trend that was categorized as unusual for their budgets.

Consumer Spending

Consumer spending was flat overall since the last report, with some variability among sectors. Unseasonably warm weather devastated firms catering to winter tourism. Hotel occupancy in February fell significantly across the District for a second consecutive month. Firms serving other retail segments reported better activity. Many South Dakota retailers reported healthy traffic and customer spending in the first quarter, though many individual owners reported challenges. Still, a contact there said, "the outlook for most seems better than a year ago." A contact with a large retail center in Minnesota said that customer traffic was increasing but "consumers are not spending quite as much per visit." Contacts also reported that consumers were trading down on purchases, particularly in groceries. "Lots of staples and fewer splurges, and more store-brand or generics. Some trading down in apparel as well," said one contact. Vehicle sales saw continued growth. One dealership with multiple locations saw recent sales rise by 14 percent over last year. Airline traffic continued to improve, rising across the board in February at District airports year over year, with some increases of 10 percent or more.

Construction and Real Estate

Construction activity improved since the last report. Construction starts in the District rose over year-ago levels, according to industry data. A majority of contacts also reported increased project activity, and future sentiment was even more optimistic. Local permitting across the District suggested some lumpiness in activity, even in the same state. Residential construction increased overall, though growth was not seen everywhere. Certain markets, like Minneapolis-St. Paul and Sioux Falls saw sizable increases, while other markets were flat. Multifamily activity slowed in many markets; in March, Minneapolis-St. Paul saw just six permitted units.

Commercial real estate improved slightly. Industrial vacancy rose slightly in the first quarter, but sources suggested that demand remained healthy, particularly in light of an expected slowdown in new construction. The office sector has "stabilized," according to one source; subleasing fell modestly, and workers were gradually returning to the office. Other commercial markets were mostly steady. Residential real estate continued to improve overall from low levels, with many markets seeing increases in monthly year-over-year sales.


District manufacturing activity slowed modestly from the previous report. Manufacturing contacts who responded to a monthly District survey indicated that their sales decreased on balance in March from the previous month. A regional manufacturing index indicated decreased activity in Minnesota and North Dakota in March from a month earlier, while activity increased in South Dakota. A metal fabricator reported, "We are in the midst of the deepest slow-down in my 35 years with our company."

Agriculture, Energy, and Natural Resources

District agricultural conditions were stable at low levels. Contacts expected decreased farm incomes in the region for the 2024 growing season. Warm weather along with widespread mild drought conditions led to a mixed outlook heading into spring planting. District oil and gas exploration activity was unchanged since the previous report.

Minority- and Women-Owned Business Enterprises

Activity among minority- and women-owned business enterprises (MWBE) was mixed. An equal share of contacts reported lower, unchanged, or higher sales. More contacts reported increases in employee headcount over the last four weeks than those who reported reductions. Almost half reported strong hiring demand. A Minnesota contact in the construction industry said they were struggling with high turnover, labor availability, applicant qualifications, and training costs. Nonlabor input prices and average selling prices were mostly flat. Similar shares of contacts expected business activity to increase and decrease in the coming weeks. Unseasonably warm temperatures also affected MWBEs whose businesses depend on winter tourism. The owner of a restaurant in Minnesota shared having to close for the season due to the lack of snow.

For more information about District economic conditions, visit https://www.minneapolisfed.org/region-and-community.

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Last Update: April 17, 2024