Minnesota Management and Budget Shifts Economic Outlook Lower

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Minnesota Management and Budget (MMB) released its semi-annual Budget and Economic Forecast yesterday. The new November forecast reflects a slight downshift from the forecast released in February. The MMB projects “limited employment growth” for the state over the next few years, a consistent but weaker outlook than expressed in the prior report. In February, the MMB projected Minnesota nonfarm payroll growth of 0.6% in 2025 and 0.3% in 2026. The new forecast calls for no payroll growth through 2026 and an average of only 0.3% annual growth from 2027-2029. Similarly, the MMB downgraded its forecast for state personal income growth from 4.3% to 4.2% in 2025 and from 5.5% to 4.2% in 2026, and it projects average annual personal income growth of 4.3% for the 2027-2029 period. The MMB cites an aging population, declining birth rates, and lower levels of immigration as contributing factors to its economic forecast.

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