N.D. economy continues growth; positive outlooks for the Fargo, Grand Forks and Bismarck metro areas
There's a mixed outlook for Minnesota's economy, but the nation's economy is shrinking and showing signs of a potential recession, according to an updated forecast released by North Dakota State University.
FARGO — North Dakota’s economy continues to show signs of growth for 2022, including higher wages, growing workforce, lower unemployment, strong tax collections and a rising total of goods and services produced statewide.
An updated Economic Outlook Quarterly Report, produced by North Dakota State University professor Jeremy Jackson, also indicates positive outlooks for the state’s three largest metro areas—Fargo, Bismarck and Grand Forks—for the second quarter.
The report, released Monday, May 2, offers a mixed forecast for Minnesota’s economy, though the Minneapolis area has a positive outlook.
Meanwhile, the U.S. economy shrank in the first quarter of 2022 and is showing signs of recession, according to The Center for the Study of Public Choice and Private Enterprise report.
North Dakota’s labor force grew by nearly 1% in the first quarter of 2022 and growth is forecast to continue. Meanwhile, the unemployment rate dipped below 3% and may continue to decline slightly in the near term, but the overall outlook calls for unemployment to remain steady near its current level, just above 3%
In the Fargo metro area, wages are forecast to grow through 2022, with unemployment falling and the workforce growing nearly 1% per quarter through the end of the year, with the unemployment rate falling. (The unemployment rate was 2.17% in the first quarter of this year.)
Housing prices are forecast to continue rising in the Fargo area, depending on how rising mortgage rates affect housing demand.
In Bismarck, wages are expected to rise through 2022. The labor force grew by 0.5% in the first quarter, and that may continue in the near term, but a small decline is possible by the end of the year and into 2023.
Bismarck’s unemployment rate was 2.63% in the first quarter of this year and is forecast to continue its decrease. Meanwhile, the city’s housing price index is rising 3% per quarter, a rate expected to continue in the near term.
Wages and the number of workers are forecast to grow throughout 2022 in Grand Forks. The unemployment rate was 2.63% in the first quarter, and is expected to continue to fall. The Forks metro area housing price index has seen strong growth; while a dip is expected for the first quarter, strong growth is forecast into 2023.
Minnesota wages and salaries are forecast to see growth in the first quarter, but decline over the rest of 2022. The labor force is showing signs of expansion, with statewide unemployment dipping to 2.7%. However, unemployment is forecast to rise by the end of the year and into early 2023.
Minnesota’s gross state product is expected to show first quarter growth before dropping through the rest of 2022. Similarly, tax collections for the first two quarters of this year are forecast to rise, before falling below 2021 levels through the end of the year.
Minneapolis, meanwhile, is forecast to see growing wages and work force. The unemployment rate was 2.53% and is expected to continue to fall. The housing index is forecast to hold steady this year.
The national outlook is worsening, with the nation’s gross domestic product dropping 0.36% in the first quarter, a trend expected to continue through the end of 2022. The national unemployment rate was 3.8% for the first quarter, but is expected to rise for the rest of the year. While consumption grew in the first quarter, it is forecast to decline through the end of 2022. Meanwhile net investment and corporate profits are forecast to fall, while prices of goods and services are likely to rise.
The economic outlook was generated April 28 using St. Louis Federal Reserve data.