April 15, 2026
Summary of Economic Activity
Economic activity in the Ninth District increased slightly since the previous report. Employment rose slightly, recent labor demand was positive, and wage growth was moderate. Prices increased modestly overall, with higher input price pressures, particularly those related to oil. Growth was noted in manufacturing, commercial construction, commercial and residential real estate, and energy. Consumer spending, services, and residential construction activity were flat. Agricultural conditions remained weak.
Labor Markets
Employment rose slightly since the last report. Surveys suggested that labor demand turned positive in February and March. While some of this increase was likely seasonal in nature, both current and future hiring sentiment was notably higher than a year ago, and fewer firms reported a decrease in labor. While firms said they were hiring most often to replace turnover, reports on head counts nonetheless ticked higher compared with the previous month and the same period a year ago. Staffing firms reported healthy new job orders. A food retailer in northwest Montana said that higher gas prices will push commuting employees to "look for employment closer to their homes or request increased wages." A contact from a T-shirt printing shop in Minnesota reported that it "would like to add staff but holding off due to economic volatility." Layoffs remained low; initial and continuing unemployment claims over the most recent four-week period declined compared with the same period a year ago.
Wage growth was moderate. Surveys showed that wages and other compensation were growing at rates similar to the previous month and the same time a year ago. A staffing firm seeing strong demand, particularly for industrial temp workers, reported annual wage increases of about 3 percent. Wage data from a payroll firm suggested that wages among District clients were flattening for salaried workers.
Prices
Prices increased modestly overall, but input price pressures intensified. In a monthly survey, 31 percent of firms increased prices to customers in March from the month earlier. Meanwhile, almost half of firms reported that their nonlabor input prices increased over the month. Expectations for the month ahead were slightly higher for pricing to customers but less for input prices. Multiple contacts reported a steep rise in freight costs due to higher diesel prices. One manufacturer reported that due to fuel surcharges, "we will need to charge more for parts being manufactured to offset those price increases." Contacts also reported increases in vinyl and plastic resin prices due to petroleum costs. A construction industry contact reported that raw material price increases in April were "much larger than normal" and vendors warned that prices would continue to increase. The wholesale prices component of a regional manufacturing index increased sharply in March.
Worker Experience
Many workers in the District faced a shrinking number of job openings, although the prospect of finding a job varied based on skills and sector. Nurses and other health care support staff remained in high demand. Meanwhile, workers looking for jobs in areas such as office administration, accounting, and creative activities were applying for more jobs and waiting longer. Some attributed the difficulties to artificial intelligence. Finding a job was easier outside of large metropolitan areas, but meeting required skills was a challenge for many. A workforce development contact said that more workers were considering further training to expand their prospects.
Consumer Spending
Consumer spending was flat since the last report. Contacts in retail, accommodation, and leisure reported slightly lower recent demand, but a majority of them expected future sales to improve. Some Minnesota firms, especially in Minneapolis-St. Paul, noted improved operations and sales with the easing of immigration enforcement actions. However, contacts reported concerns over rising fuel and other costs and tight household budgets. A family restaurant in Michigan's Upper Peninsula said recent business had fallen because the store's cost of goods was rising and "the average customer does not have as much to spend going out." Regional airports saw single-digit increases in passenger travel, while Minneapolis-St. Paul International Airport experienced single-digit declines, which was attributed to decreased international travel. Contacts also expected ticket prices to rise with increased fuel costs. March vehicle sales were lower compared with last year at a large dealership in the western portion of the District.
Services
Activity among services firms was flat. Contacts in financial services reported improved business, with expectations for continued improvement. Firms in nonfinancial services reported declines, however. Medical services firms were experiencing a drop in demand for elective procedures. Shortages of commercially licensed drivers and rising fuel prices were adding pressure to freight firms. A contact for a South Dakota vehicle repair shop also noted that business was "slower than usual," with customers "holding off on larger repairs" due to higher gas prices, the conflict in the Middle East, and general uncertainty. A Minnesota marketing company contact said that sales were lower as "many enterprise clients are pausing work" and the company would be cutting jobs "if we don't see revenue pick back up."
Construction and Real Estate
Construction activity in the District edged up modestly in recent weeks. Nonresidential construction continued to outperform residential construction. Job openings increased in preparation for the spring season. Labor challenges in the industry persisted, particularly in rural areas, where talent continued to retire. "We are looking to hire, but [are] unable to find qualified candidates," shared a Montana builder. A contact from a midsize company in Minnesota reported laying off 20 percent of its workers due to immigration enforcement. Another contact said the busy construction season will be challenging, "given the uptick in construction demand amid the current labor market. I am forecasting delays across all trades [and] expect projects to be delayed." Increased input prices, growing freight challenges, and geopolitical uncertainty were putting pressure on the sector.
Commercial real estate grew slightly. A multifamily property contact reported healthy rental demand; new apartment construction has been subdued, which has lowered vacancies. Retail vacancy rates were low but ticked slightly higher, and contacts reported some nervousness over softer tenant sales. Office space was improving slightly, particularly outside of core urban areas and assisted by a dearth of new construction. Residential real estate showed signs of improving. While February home sales were subdued, available (but limited) March sales data showed double-digit increases in a number of western District markets compared with last year.
Manufacturing
Manufacturing activity increased moderately since the last report, but sentiment remained mixed. Among manufacturing survey respondents, 44 percent reported an increase in orders in March compared with a month earlier, and a quarter reported a decrease. A similar share of respondents expected sales to increase in April. However, commentary from manufacturers was mixed. "Good to see some pickup in demand," commented a metal fabricator, "However, very little foresight into conditions much beyond the next week or two. It is challenging." An index of regional manufacturing conditions indicated that activity increased in Minnesota, North Dakota, and South Dakota in March from the previous month.
Agriculture, Energy, and Natural Resources
District agricultural conditions remained weak since the previous report. Contacts viewed recent increases in cash prices for grains and soybeans positively but expected that sharp increases in diesel and fertilizer input prices would squeeze margins. Reports going into planting season indicated that District farmers were planning to increase corn acreage, but market volatility cast considerable uncertainty on that decision. District oil and gas exploration activity increased slightly from the last report.
For more information about District economic conditions visit: https://www.minneapolisfed.org/region-and-community.