FARGO — During these days of rising inflation and clogged supply chains, a number of economic indicators — including a growing gross national product and climbing oil prices — are boding well for North Dakota.
That's according to an economic outlook from Jeremy Jackson, director of the Center for the Study of Public Choice and Private Enterprise and a professor in the Department of Agribusiness and Applied Economics at North Dakota State University.
While Jackson's outlook pointed to a number of positives for North Dakota, he cautioned that some of the economic strengths he outlined may be transitory, because they're being supported by increased spending by the federal government.
Although gross domestic product figures have been growing since the U.S. experienced a brief recession in the second quarter of 2020, there are indications that growth is slowing, he said.
"That's not the best of signs that we as economists look for," said Jackson who presented his outlook this past week at a virtual conference that featured insights from NDSU researchers.
On another front, Jackson said national numbers for personal consumption have been strong, which he said should contribute to good economic outcomes. He tempered his optimism, however, by pointing out that some of that personal consumption has been fueled by increases in government spending.
He said the same dynamic exists with net investment made by corporations.
While corporate net investment has been strong, he noted, it has been propped up by government spending at the federal level, too.
Likewise, Jackson said, corporate profits have soared since the pandemic began, but much of that could also be attributed to government relief packages aimed at sustaining corporations.
Crude oil prices have risen above $80 a barrel, a level not seen since about 2014. That is a positive for North Dakota, he said, as it means increased tax revenues and economic activity.
But, he added, higher oil prices can be a negative for the nation as a whole, as higher energy costs can be a drag on GDP growth.
"What's good news for us in North Dakota can be bad news for those in other places," Jackson said.
The worker shortage that North Dakota was experiencing before the pandemic remains in place, he said, and it's more challenging because many other states are now in the same boat.
"We're actually having increased competition for workers in other locations than what we had before the pandemic," Jackson said. "We can't expand if we don't have workers to fill jobs."