Minnesota’s latest economic forecast gives some hope for more widespread recovery starting next year, but state economist Doctor Laura Kalambokidis says what actually happens is critically dependent on the path of the pandemic, including “timing of a vaccine, and the pace of lifting restrictions on economic activity. All of those uncertainties amplify economic risks, including when and whether businesses and consumers will feel safe resuming normal activities, and whether businesses that have been affected by social-distancing restrictions will make it through the next year.”
Kalambokidis says the service sector is not expected to fully recover until a significant portion of the population is vaccinated. She says real GDP is forecast to regain its pre-pandemic peak in early 2022, and economy to return to full employment in 2024.
Minnesota’s unemployment rate is significantly better than the national average, but Kalambokidis cautions that, for reasons not fully understood, a significant number of Minnesotans have stopped looking for work. If that changes, the jobless rate could go up.