Ramstad: Minnesota dodges recession again, but who knows for how much longer

Stop me if you’ve heard this before: Minnesota avoided a recession earlier this year, under the oft-used definition of two consecutive quarters of economic decline, because growth in the second quarter rebounded strongly from the striking decline in the first.

It may sound like the same thing I wrote a year ago, but it’s actually not. Here are some critical differences, along with some updates on other columns.

Last year, low farm profits hurt Minnesota in the first quarter, and the rebound in the second came from spending in state and local government.

This year, Minnesota was hurt by a pullback of corporate spending as President Donald Trump rolled out tariffs. Then the economy snapped back in the second quarter, when it seemed Trump wasn’t going to go through with the worst of his tariffs.

This fall, the tariffs have grown and the flow of data about the economy has stopped. Last week, we should have gotten updates on inflation and seniors should have learned about the cost-of-living adjustments to Social Security. That’s all on hold because of the government shutdown.

Even the details on state GDP performance in the second quarter, released in late September, are now unavailable from the Bureau of Economic Analysis.

We do know, however, from the state of Minnesota that exports fell 19% in the second quarter as the state’s biggest trading partner, Canada, cut its purchases of our goods by nearly half.

As a result, despite the exuberance in the stock market, I remain worried about what’s going on in the broader economy in both the state and the country. Trump’s policies on tariffs and immigration, as I’ve written before, are wrong and rooted in misunderstanding the economy.

They’ve also been badly executed. This weekend, the Wall Street Journal reported the White House was quietly “tiptoeing away” from many tariffs. Even so, I expect the negative consequences, specifically high prices, to continue.

On another economic topic, I wrote the past two autumns about an expected shrinking market for colleges as the effects of a declining birth rate start to show. But this fall, things are going quite well for the University of Minnesota and Minnesota State systems, and for many other colleges.

I checked in with one of the institutions I consider a bellwether on growth: Minnesota North College, part of the Minnesota State system with campuses in Grand Rapids, Hibbing and three other communities.

Since I visited there in spring 2023, Minnesota North has had three straight years in which fall enrollment grew, Michael Raich, its president, told me last week. That has created a partial reversal to a decade of enrollment declines.

“The concern, of course, is can they continue to afford it?” Raich said, referring to the state. “In all of the good news of enrollment going up, expanding programs and the North Star Promise, that’s just looming on everybody’s mind.”

In another update, Minneapolis-based McKnight Foundation, which I wrote last year is at the center of the largest philanthropic program to invest in Minnesota businesses ever, this month finished renovating the former office of ad firm Periscope as its new headquarters.

The re-do is more than just a design update to four former industrial buildings, the oldest dating back to 1883. It’s the first time that a commercial building in Minneapolis has been transformed to be fully decarbonized. It used to use natural gas for heating, and is now run on a thermal energy storage system using water and ice.

The building uses a massive heat pump with giant water storage tanks. In the summer, it uses off-peak electricity at night to freeze water, which is then circulated during the day to cool the building. In winter, the heat pump pulls heat from the air, which works because even cold January air contains a bit of heat that can be harvested.

The result is an all-electric, carbon-neutral heating and cooling system worthy of an institution that is putting resources into innovative construction alternatives.

Jeff McComas, the Woodbury engineer, pickleballer and promoter of DIY investing whose clear-eyed approach to life and cancer I wrote about in July, died Sept. 8.

McComas helped start Minnesota Bogleheads more than 20 years ago, a group devoted to the keep-it-simple investing ideas of Vanguard founder Jack Bogle. It has grown to hundreds of members in the metro area. At the group’s quarterly meeting in late September, president Chris Harrington and a few others told stories about McComas.

McComas wrote a funny and inspiring final message on CaringBridge, saying he believed the meaning of life resided in making human connections.