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Monday May 20, 2013

What are the forces moving the Minnesota economy? Adam Belz tries to identify the trends and show the connections between Minnesota and the larger U.S. and global economies. You can connect with him on Twitter: @adambelz

Posts about Economics

Minnesota sheds 11,400 jobs; unemployment rate drops to 5.3%

Posted by: Adam Belz Updated: May 16, 2013 - 10:07 AM

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Minnesota’s job market posted its second straight negative month, shedding 11,400 jobs in April, the state said Thursday.

The biggest job losses were in trade, transportation and utilities, which shed 5,700 jobs, according to figures released by the Minnesota Department of Employment and Economic Development.
 
Meanwhile, the Minnesota unemployment rate fell to a seasonally adjusted 5.3 percent in April, its lowest point since May 2008 and well below the U.S. rate of 7.5 percent in April. The March figures were revised upward from 5,200 jobs lost to 3,300 jobs lost.
 
Minnesota has now fallen behind the nation in job growth over the past 12 months, at 1 percent, compared with a U.S. rate of 1.6 percent during that period.
 
"While we've seen mixed results in the labor market in recent months, the overall outlook for jobs in Minnesota remains positive," said Katie Clark Sieben, commissioner of the department. "Eight of the state's 11 major industrial sectors have gained jobs in the past year, and the unemployment rate is at a five-year low."
 
Government, hotels and restaurants, manufacturing, professional and business services, financial activities and construction all lost jobs on the month as well.
 
In the state Metropolitan Statistical Areas, job gains occurred in the past 12 months in the Minneapolis-St. Paul MSA (up 1.5 percent), Rochester MSA (up 0.9 percent), Duluth-Superior MSA (up 0.8 percent), Mankato MSA (up 0.7 percent) and St. Cloud MSA (up 0.2 percent).

Opening Belz, May 9

Posted by: Adam Belz Updated: May 9, 2013 - 10:14 AM

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Looks like Abbott Labs has developed a disappearing stent – StarTribune
Jobless claims are down, but what the U.S. needs is more hiring – WSJ
Some stuff on how Millennials are lazy, but will save us – TIME
Shuttered Georgia-Pacific hardboard plant remains idle – Duluth News Tribune
U.S. taxpayers employ 2 million low-wage workers in the private sector – Washington Post
“Immediate deficit reduction is a drag on full economic recovery” – NY Times
British manufacturing perked up in March – Economonitor
How American universities are using Pell grants to get more rich students – Felix Salmon
Here’s the study he references – New America Foundation

Minnesota export growth not gangbusters, but sets another record in 2012

Posted by: Adam Belz Updated: May 8, 2013 - 9:22 AM

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Minnesota exports of agricultural, mining and manufactured goods rose 1.2 percent in 2012, an increase of $246 million over the year before, the state reported Wednesday.

That's not gangbusters growth, but it qualifies as a new record for the state. Exports were $20.6 billion, and Minnesota ranked 20th among all states in sales overseas. Manufacturing exports support nearly 115,000 Minnesota jobs, the state said.

"Minnesota exports have been on a record-setting pace for more than two years and have contributed to new jobs and investment in our state," said Katie Clark Sieben, the commissioner of the Department of Employment and Economic Development. "This growth signifies an opportunity for Minnesota and Minnesota businesses, and it is critical that we continue to build on this success."

Canada was Minnesota's largest national market, with sales climbing 2.7 percent to $6 billion, accounting for 29 percent of exports. Other top export markets were:  China ($2.5 billion, up 7.1 percent); Mexico ($1.3 billion, up 6.7 percent); South Korea ($707 million, up 0.8 percent); Belgium ($640 million, up 2.7 percent); and Taiwan ($489 million, up 0.1 percent).

Other countries among the state's top 20 export markets were Japan, Germany, the United Kingdom, the Philippines, Singapore, Australia, the Netherlands, France, Brazil, Ireland, Thailand, Italy, India and Switzerland.

The state's top export product was machinery, which accounted for $4 billion in sales, up 2.2 percent from the previous year. Other major exports were: optic, medical instruments ($3.1 billion, up 10.4 percent); vehicles ($1.9 billion, up 10.4 percent); ores, slag, ash ($668 million, up 68.5 percent); food waste ($516 million, up 6.8 percent); and mineral fuel, oil ($502 million, up 15.6 percent).

The big jump in exports of ores, slag and ash ($668 million, up 68.5 percent) was driven by major increases in sales to China (up $256 million) and Canada (up $36 million). Other top exports from Minnesota were electrical machinery; plastic; aircraft and spacecraft; meat; iron and steel products; paper and paperboard; miscellaneous grains, seeds and fruit; cereals; and iron and steel.

Last year, Gov. Mark Dayton announced the MSP Export Initiative, a new trade strategy aiming to double Twin Cities exports by 2017. This initiative focuses on growing exports, increasing the global visibility of the Twin Cities region and helping companies get their products into foreign markets. The initiative was developed through a partnership between the Minnesota Trade Office, the city of Minneapolis and the Brookings Institution.

The governor also is planning a trade mission to Germany, Sweden and Norway in June. The goal of the trade mission is to increase state exports, attract foreign direct investment opportunities, and connect with potential customers and longstanding partners in Europe and Scandinavia.

South Dakota governor to recruit Minnesota workers at Mall of America

Posted by: Adam Belz Updated: May 7, 2013 - 3:33 PM

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South Dakota Gov. Dennis Daugaard will be able to recite a litany of numbers to make his case when he visits the Mall of America next week to try to persuade Minnesotans to move west. But the most recent Census migration figures between the two states show it may still be a tough sell.
 
The governor will make a case for a state with low taxes and a low cost of living. South Dakota has the second-lowest per capita taxation in America. It has no corporate income tax, no personal income tax, lower cost of unemployment insurance than Minnesota, lower cost of living, lower health care costs and cheaper energy. All that information is available here, on a state website where you can compare the costs of business in South Dakota and any other state.
 
Despite all this, South Dakota's success luring Minnesotans has been limited.
 
The state launched DakotaRoots.com – a website designed to connect out-of-state workers with in-state careers – in October 2006. Some 534 people have found jobs and relocated their families from Minnesota to South Dakota through the website, the governor's office says. About 3,000 Minnesotans have registered with the site over the past seven years.
 
But South Dakotans have also been moving to Minnesota. Migration from Minnesota to South Dakota was, in 2011, a net of 37, according to U.S. Census data. 5,342 people left Minnesota for South Dakota, but 5,305 South Dakotans came east. 
 
North Dakota does a more brisk trade in residency with Minnesota, partly because of the border cities of Fargo and Grand Forks. The state with the oil boom netted 4,670 Minnesotans in 2011, the latest year for which the data is available. 12,244 moved from Minnesota to North Dakota, and 7,574 came back this way. 

Correction appended: An earlier version of this story was incorrect in saying that migration from Minnesota to South Dakota was a net of 339 in 2011, according to U.S. Census data. The actual net migration to South Dakota that year was 37.

Recession has widened racial wealth gap, report says

Posted by: Adam Belz Updated: April 30, 2013 - 11:57 AM

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The recession widened the gap in wealth between whites and minorities, a new report from the Urban Institute says.

Hispanic families lost home equity in the housing crash and black families lost retirement assets, likely because of job loss, the think tank said. 

Between 2007 and 2010, Hispanic families saw their wealth fall 40 percent, the report said, and blacks saw their wealth fall 31 percent. Whites, by comparison, lost 11 percent of their wealth.

The researchers defined wealth as a family's assets minus its liabilities, as calculated by manipulating the Fed's Survey of Consumer Finances over time. (Here's the one from 2010.) It's a lot of data.

This hits home in Minneapolis, where black unemployment was estimated at 27 percent in 2011 by the Economic Policy Institute. Also, home prices in three of the city's poorest sections -- Camden, Near North, and Phillips -- remain more than 60 percent below their pre-recession highs, according to the Minneapolis Area Association of Realtors. Homes in north Minneapolis routinely are worth a third or a fourth of what people paid for them in 2005.

The 6-page Urban Institute report said the trend toward a widened racial wealth gap is long-term. The average wealth of whites nationally was roughly five times that of blacks and Hispanics in 1983. By 2010, the average white had six times the wealth of the average black or Hispanic person. 

"While the Great Recession didn't cause the wealth disparities between whites and minorities, it did exacerbate them," the authors wrote.

The NYT had a piece on the report yesterday, which is how I came across it.

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