Forecast calls for dip in N.D. incomeToby Madden, a regional economist at the Minneapolis Federal Reserve Bank, said the drop should put the state at pre-2007 levels, before record oil and crop prices that have since slid.
By: James MacPherson, Grand Forks Herald
BISMARCK — The Federal Reserve Bank of Minneapolis is forecasting a 15.4 percent drop in personal income for North Dakotans this year but after two years of huge growth, it’s still good, a regional economist says.
Toby Madden, a regional economist at the Minneapolis Fed, said the drop should put the state at pre-2007 levels, before record oil and crop prices that have since slid.
“It’s not a disaster if it drops off 15 percent, because the last two years were really good years,” Madden said. “Going back to levels two years ago is still good.
“After two big years, you would expect a down year,” he said.
The Minnesota Fed’s forecast includes Minnesota, Montana, North and South Dakota, northwestern Wisconsin and the Upper Peninsula of Michigan.
The Fed’s outlook says North Dakota is the only state in the region where non-farm employment is expected to rise, at 1.1 percent. The forecast pegs North Dakota’s unemployment rate at 4.4 percent by year’s end.
North Dakota’s unemployment is about 3.5 percent at present, said Pam Sharp, director of North Dakota’s Office of Management and Budget.
Sharp said the state has amended its forecast in personal income tax collections for the 2009-2011 budget period, from $675 million to $665 million.
“The revenue forecast does call for personal income to go down because of the effects of the national economy,” Sharp said. “It’s filtering into North Dakota, and a lot of people are seeing losses in investments, for one thing.”
Still, she said, North Dakota’s economy is healthy.
“I would say our economy is stable, very stable,” Sharp said. “No one remains unaffected by this national recession, so just to hold our own means we’re doing very well.”