Montana’s Department of Labor & Industry (DLI) Commissioner Sarah Swanson issued an upbeat labor report on Labor Day. The report shows employment continues to grow, unemployment remains near record lows, and wage growth over the last year resulted in an increased standard of living for Montana workers.

A significant finding is that Montana ranks 2nd in the nation for fastest wage growth since 2020. Another important fact is that business formation in Montana reached a record high of 23,000 new business in 2023.

Swanson’s report states that while the state continues to face a workforce shortage, with two job openings for every one unemployed person, there are signs that the labor market is beginning to ease. Over 10,000 more Montanans entered the labor market in 2023 – a welcome sign for many businesses who have been struggling to find workers.

Labor market highlights include:

–The Montana labor force reached a record high of over 580,000 people mid-way through 2024. Strong wage growth and a significant uptick in in-migration has helped increase the available pool of workers for Montana businesses.

–Montana ranks 4th in the nation for the highest rate of in-migration since 2020. The state’s population grew by 4.7% from 2020 to 2023 due to in-migration, translating to an additional 51,000 people.

–About 73% of people who recently moved to the state are either employed or actively seeking work, which is higher than the labor force participation rate of existing residents.

–Montana ranks 8th in the nation for fastest employment growth since 2020 – adding over 30,000 jobs through the first half of 2024.

–Employment grew by 1.6% in 2023, translating to 8,700 jobs added.

–Professional services grew fastest among the private sector, adding 1,120 jobs at a growth rate of 4.1%.

–Healthcare added the most jobs in 2023, creating over 2,340 new jobs.

–The average wage earned by Montana workers reached $57,230 in 2023, growing by 5% over the year. Montana ranks 2nd in the nation for fastest wage growth since 2020.

–Real wages grew 0.8% in 2023, the 6th fastest among states. Real wage growth suggests that Montana workers are able to afford more goods and services with their wages than before.

–Professional service workers had the fastest real wage growth of 5.1% in 2023. The average wage reached $94,600, making it the second highest paying industry in Montana after natural resources.

–Tight labor market conditions persisted in 2023, with nearly two job openings for every one unemployed person.

— The state’s aging population and increased retirements have driven long run declines in labor force participation. A total of 330,000 Montanans are not employed or actively seeking work. Most (61%) of these individuals are retired.

The strength of Montana’s labor market helps support economic growth in the state. Record-high business formation propelled economic output to new heights. Continued growth in the Montana economy translated to more income for Montana households. Inflationary pressures eased in 2023, providing some relief to household budgets. Montana workers and businesses drove economic expansion throughout the state.

–Montana’s economic growth of 2.2% in 2023 was an acceleration from the prior year.

— Montana ranks 1st in the nation for GDP growth in the professional services industry, driven by the expansion of high-tech opportunities in the state.

— Nearly 2,000 new professional services businesses were started in Montana in 2023, which accounts for almost half of all new businesses established in the state.

— Business formation in Montana reached a record high of 23,000 new business in 2023

— Montana ranks 3rd in the nation for self-employment, with nearly 30% of the workforce operating their own business.

— Personal income has risen by 7.5% annually since 2020 – ranking Montana 4th fastest for growth among states.

— Per capita income rose to $63,918 in 2023 – ranking 28th among states.

— Price growth moderated in 2023 across a variety of goods and services. By mid-2024, inflation fell to 3% over-the-year.

–Housing prices continue to be the primary driver of inflation. However, the pace of housing price growth is beginning to slow in Montana.

— Montana home prices rose 4.7% in 2023 compared with 5% nationwide.

— The typical home value in Montana averaged $470,000 in the first half of 2024 – representing a 70% rise in home values over the last five years.