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Public Banking: Bank of North Dakota Assets

8 days ago

I’ve given lots of interviews related to public banking over the last week. People are looking to North Dakota to gauge the likely outcomes in California. This is flawed for many reason but perhaps the biggest is that North Dakota does not have a law like California. North Dakota created THE Bank of North Dakota, not a law allowing various municipalities to create public owned banks. That is what the California legislation allows.

There are lots of reasons to question the wisdom of public banking, This is clearly an industry with many private sector participants already, so where is the market failure? I suspect public opinion right now pushes towards acceptance of public banking based on the circumstances of the Financial Crisis of 2008-9. Why?

The banking industry received

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Caller observation: Minimum Wage

15 days ago

There is a frequent caller to the radio station, and in anticipation of his call tomorrow I thought I would put up a chart of the minimum wage. This caller focuses on various aspects of the minimum wage, but a key feature is the declining value of the minimum wage. I provide both the real and nominal minimum wages in the following graph.

So even with the increases in the minimum wage over time, inflation eroded the value of the minus wage as you would expect. The value of the minimum wage has been on a long decline since the 1970s and 1980s which is the caller’s significant point. In terms of a nearby value there is a steady decline since 2010.

Now on the radio we have a broader discussion about what the minimum wage really represents and that is a fine discussion to have

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Quoted in Vox article

15 days ago


Economist and economic historian with an interest in population analysis and demographic methods. Especially interested in natural disasters and disruptions to economic activity and changes in population dynamics, as well as fiscal and monetary policy with forecasting implications. Husband, father, Cubs fan.
View all posts by David

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Labor Force Growth and Streaks

16 days ago

I was looking at labor force data again and thinking about the consecutive months of increase in North Dakota. I went back to 2001 for the data and found that North Dakota enjoyed a streak of 53 consecutive months labor force increase from August of 2009 to December of 2013. Now this is just a simple increase, not a percentage change or any type of scaling, so an increase of one represents an increase, though it may seem trivial. During the oil boom the increase was typically larger, with an average increase of 777.5 workers per month, but even if a few months were low numbers it was still an impressive streak.

On the face of it that number may not seem like a great deal. However, the relative concentration of those workers would be significant and in many cases in areas that

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ND July Unemployment Rate

22 days ago

Those that read this blog regularly or listen to my appearances on the Jarrod Thomas Show know that I do not find unemployment to be a very informative metric for North Dakota. A primary reason for this is that North Dakota is clearly a labor constrained state. Countless pieces of data over many years makes this abundantly clear. The supposed lack of labor market adjustment to this persistent outcome is a whole different story for another day.

The latest data for unemployment continue to make the case that this number is not a helpful policy tool. Take the last two months of observations.

These maps look almost identical. There are only minor differences really. If we wanted to gather some meaning out of these representations we could look at the monthly change in the

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North Dakota Median Age, 2010-2018

28 days ago

I received several questions from media and others this week that boil down to a question of age in the state. The age profile of the state is important in terms of many aspects. First, the trajectory was bad from about 1997 on with significant departures of young and significant remaining by the older. This impacted everything from business succession planning to bank deposit management.

With oil there was a change in the trajectory. The inflows were younger and the outflows were older. There were various reasons for the change but suffice it to say it was about everyone taking advantage of their opportunities.

State Changes

The state got younger, significantly younger. From 2010 to 2018 median age in the United States went from 37.2 years to 38.2 years. Median age in

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The Week Ahead ~ 16 September 2019

September 16, 2019

There are several US data series worth paying attention to this week for the data inclined person in North Dakota. At the U.S. level we will get private housing starts for August. Housing is an interesting US and North Dakota issue so national trends certainly bear watching.

There will be oil market volatility to scrutinize. The situation in the Middle East is heating up, obviously, and that matters for North Dakota and the US is ways different than 20 years ago. Higher prices will encourage increased production in places like the Bakken and the Permian Basin but labor constraints make it less than a foregone conclusion that we will see increased production from those formations.

I think another area of interest in this regard will be exchange rates. The US dollar is in a

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Capital gains and inflation are complicated

September 12, 2019

So I look at the New York Times this morning and the article saying President Trump will not be indexing capital gains for inflation via fiat. Obviously the significant discussion within the article relates to the political consequences as well as a cursory look at budget math. It would clearly represent a tax cut and, not surprisingly, would disproportionately benefit wealthier individuals and households.

There is more complicated and nuanced issue under the surface. Frankly, I would be very worried about the supply and demand aspects within asset markets as the result of such a change. It would seriously impact the willingness to sell at a given price when the seller is facing lesser after tax implications. As a result buyers likely face higher prices for a variety of assets.

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Fertility Stability in North Dakota

September 12, 2019

*The data and analysis from this post are part of an ongoing population projection being down with colleagues at UND.

Among all the concerns related to North Dakota the population has long been at the top of the list. This is as it should be since population is a significant constraint on economic activity. There are two possibilities for the source of the issue: fertility or migration. Why do I leave out mortality?

There is no evidence that mortality experience in North Dakota is largely different from the US experience (I am acknowledging that I am not addressing that there are subpopulations in the state for which there are enormous differences such as Native American males). The fact is that significant deviations from the mortality experience from other places would be

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Yield Curve Inversion and North Dakota

September 5, 2019

With all the concern about recession at the national level due to the inversion of the yield curve it seemed a natural thing to take a look at the circumstances in North Dakota when the curve inverts. The results are a bit puzzling and will require some further thought before finalizing them. 

Looking at the 10-2 spread and the total income for North Dakota since 1976 gave me a few opportunities to look at inversion and state performance in this regard. I varied the time horizon between 4 and 8 quarters after the yield curve inverted. On average the annual percentage change in total income in the four quarters after a positive 10-2 spread is around 2 percent. for the four quarters after the yield curve inverted it is almost 9 percent. 
If we extend it out to eight quarters the

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North Dakota and US Recession

August 29, 2019

This seems to be a question on the minds of many these days, and with the disaster that is the current state of fiscal policy it is not a surprise. Yes, I am leaving out monetary policy for now and we can discuss the merits of that in a later post.

North Dakota is a state in the cross hairs of some current US policy choices, notably the current trade conflict with China. The inconsistency of messaging is an issue on its own preventing all economic agents, farmers, traders, and Chinese negotiators, from knowing the proper decisions going forward. There is always uncertainty in economic decisions, but the uncertainty present in current US policy stances and actions is a new and arguably is the first instance of this coming from the US in the lifetime of many farmers.


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Comparing ND and the US

August 22, 2019

There is obviously a great deal of interest in fiscal and economic performance in the US based on recent policy discussions and suggestions. So clearly there will be a great deal to process and digest there. For this post, let’s just consider the movement in US and ND GDP over the last decade plus.

This is percentage change in year-over-year fashion to remove any quarterly seasonality. The relatively strong performance for ND from 2006 to around 2012-13 will not be a surprise to anyone that read a post here before. The strength of mining, the lack of banking issues in ND during the Great Recession, and strong state finances insulated the state from the worst of the crisis and aftermath.

However, after the commodity cycle hit farms and oil took a dive the state

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State of the economy, North Dakota edition

August 1, 2019

The Bureau of Economic Analysis released updated numbers for state level GDP in the last week. The update is through 2019Q1 but it is still an update. There are so many different things to consider and angles to understand that we need to start somewhere. So let’s talk about private versus public share of the economy.

Private Sector v. Public Sector

One of the more constant themes when I appear on the radio discusses the scale of the private sector versus the public sector. So when we look at the relative size of the sectors we see that there is not much change, but that government is getting smaller as a share of the economy in general.

Agriculture v. Mining

Another of the major questions asked frequently has to do with the primacy of sectors in the economy. This

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Can we recognize nobody cares about deficits and debts?

July 25, 2019


Economist and economic historian with an interest in population analysis and demographic methods. Especially interested in natural disasters and disruptions to economic activity and changes in population dynamics, as well as fiscal and monetary policy with forecasting implications. Husband, father, Cubs fan.
View all posts by David

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Facebook Currency and the Great Misperception

July 16, 2019

Facebook is starting its own currency and the world is abuzz with it. The Chairman of the Federal Reserve received multiple questions about libra, as it is to be called and aside from calling it LIBOR (which stands for London InterBank Offered Rate, a key interest rate) by mistake the response has been somewhat unremarkable. Which is as it should be. A couple of my radio interviews focused on this issue at this point so I felt it time to put up a post dealing with questions I answered already so that we can get to newer questions.

Should the Fed be concerned with cryptocurrency?

From the perspective of managing monetary policy the answer is pretty clearly no. The general usage of cryptocurrencies, while a large amount, is not enough to warrant concerns on the policy front.

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On the radio today

July 11, 2019


Economist and economic historian with an interest in population analysis and demographic methods. Especially interested in natural disasters and disruptions to economic activity and changes in population dynamics, as well as fiscal and monetary policy with forecasting implications. Husband, father, Cubs fan.
View all posts by David

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ND County Unemployment Rates, May 2019

July 11, 2019

Unemployment is one of the most frequently discussed economic statistics though it is of questionable value in terms of economic forecasting or even as any kind of indicator right now. The labor markets are so strong there really seems to be little value to the measure right now. It is also through contrast or consistency over time that the measure is of the most value.

Rolette County is the high outlier in the state right now. There are two very cool spots in the state right now. Just to be clear, cool is good since it means low unemployment in this case. The western part of North Dakota and the eastern part of the state are clearly very low unemployment, in fact they are too low for my liking. While the higher rate counties are in the middle third of the state the rates, by

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Initial Unemployment Claims in ND

June 20, 2019

Rather than simply looking at conventional measures like the unemployment rate in North Dakota, I thought it time to look at other measures to forecast, such an initial unemployment claims. There are some manipulating needed to the series but here is a look at the raw data.

There clearly is a degree of seasonality and some other cyclical issues to tackle, though by and large the series is fairly stable and pretty low in terms of the level and the rate for unemployment claims.

One of the more interesting aspects of this series is that there is some clear correlation with large sector growth such as energy, but it does not create lasting changes. It only changes the relative levels for the peaks, and even the troughs remain largely the same.
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Interest rate decreases are a cure in search of an ailment

June 19, 2019

A question I got last week from the radio audience asked if interest rates needed to go down. In brief, my answer was, and remains, no. It is hard to find a metric by which the economy is not doing at least reasonably well. That is, as long you believe deficits do not matter. I happen to believe they do matter and that fiscal policy is a problem of epic proportions with no sign of resolution.

Enter the President with his rhetoric against the Fed and little to no understanding about monetary policy goals, targets, and well anything else, based on his Twitter feed and public remarks. The press releases from the White House claim economic performance under President Trump is already the greatest in history. So what exactly is the rationale for rate cuts. First a comical answer and

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North Dakota Unemployment Rate, April 2019

June 13, 2019

North Dakota’s unemployment rate is too low, or so I maintain. The extremely low level is an issue for firms thinking about locating into North Dakota. They would need to bid up wages to lure workers. The April data by county for North Dakota seems to suggest that unemployment rates remain low.

For the most part the rates are low across the state, especially in the major metropolitan regions. Rolette county is a bit higher than other parts of the state. The unemployment rate in the state is only 2.3% in April.

Barring a major transformation in the state economy it would seem to be a matter of policy concern to start asking if we are at full capacity for the economy. Without more labor or productivity gains it is difficult to see how output levels increase appreciably in the

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Why a trade war with Mexico is a bigger deal

June 6, 2019

So I received several questions about the prospects of trade war with Mexico and why it seemed there was a bigger deal made about it compared to a trade war with China. The answer is pretty obvious when you look at the data.

The total flow of goods (imports and exports) between the US and China in 2018 (according to the Census Bureau) was almost $660 billion. In 2018 the same amount for Mexico was just under $612 billion. Now $48 billion is a large sum of money, but I wage it is a surprise to many that the total trade flow between the two countries is so close. Here is another surprise: Mexico is more important to US businesses. Why do I say that? Look at the dollar amount that the US exports to the two countries.

In 2018 the US exported $120.3 billion of goods to China. In

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Mortgage & Rent in ND Counties

May 30, 2019

Frequently the discussion on the Jarrod Thomas Show turns to factors like income and costs which can be very tricky to measure. Why tricky? It is not the case that everyone buys the same basket of goods, has the same number of children, same family situation, and so on. We use measures like median and average because they are the best we have, but that does not make them great. Still, you do the job with what you have.

To begin here is a look at the median home value in ND counties.

The higher median values are mostly in the Bakken region and in Bismarck. The lone outliers, really, in the eastern part of the state come in Cass and Grand Forks counties. So in terms of the discussion about the cost of living in Grand Forks, the value/cost of housing would seem to fall into

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Metro Area Income in North Dakota

May 23, 2019

A recent topic of conversation on the radio has been a comparison of different metropolitan areas in the state of North Dakota. There are many metric used and combined to create these types of rankings and the value of any of them depends on the interests of the readers and the interests of the people in the communities. Sometimes they measure things that are not relevant to people. I prefer to deal with simpler discussions of more definitive measures like income or wages. We can always branch out into broader discussions if needed, but starting focused is better. In keeping with this I offer up the following graph. 

Median Income

I look at median income by occupational categories as well as the overall median across all occupations for the metropolitan areas of Fargo,

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Natural Increase in North Dakota

May 9, 2019

I am a big believer that population drives much of the economy in North Dakota. While it may not drive everything the population represents a significant constraint on the potential growth of the state. The migration information has, for the most part, been positive these last several years. There should be similar interest in the rate of natural increase.

The rate of natural increase is birth rate less death rate. At the county level it is not always positive which should not be too surprising given the age structure in North Dakota.

The Bakken region and surrounding areas are among the highest level of natural increase. The Red River Valley region also has a positive rate of natural increase as does the Bismarck area. After that it is a bit more spread out without a

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Comparing MLB year-to date

May 2, 2019

So JT and I are big baseball fans and baseball is a frequent topic on the radio. I decided to take a quick look at the results of the season so far, with a specific look at comparisons with this time last season. Let’s start with what is in all likelihood the most notable difference between last season and this season: the Boston Red Sox. On May 1, 2018 the Red Sox were 21-8 with a +62 run differential. On May 1, 2019 the Red Sox are 14-17 with a -23 run differential. While runs scored are down for them so far this year compared to last (-24), the bigger issue is in runs allowed, where they allowed 61 more than this time last year. So last year’s World Series Champ, and pretty much the wire-to-wire best team in baseball is not scoring as much and is allowing way more runs than last

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Migration & North Dakota in 2018

May 2, 2019

Immigration, legal and illegal, is clearly a hot story in the news these days. North Dakota is on an international border but it seems that even here the circumstances on the US-Mexico border are of more concern than any impending inflow of Canadians. More on that in another post. It is time to consider some numbers.

There are multiple definitions of migration to consider in this post. The unit of analysis will be counties in the state of North Dakota. The measures are all net migration, that is the balance of inflow less outflow. So that is two flows to consider, but we will add another wrinkle. The migration can be domestic in nature, that is from other areas within the US, or it can be international.

Why this breakout? Why not? Just kidding, the real reason is the

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North Dakota Population Estimates for 2018

April 25, 2019

The Census Bureau released their latest population estimates by county for the US which includes mid-year estimates for 2018. The state has 760,077 people, which seems to be an all time high. As with all things the distribution matters too. First off, here is the total population change by county:

Not a real surprise if you ask me. Cass County is the big change county at more than 3,000 added. The Bakken region is the next up in that regard, with only a few counties losing significant numbers. So let’s scale this change by the total county population. The percentage numbers tend to tell a different story.

This map tells a slightly different story. The largest percentage gains are clearly in the Bakken area while the North central part of the state seems to be the one losing

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Additions to the Legacy Fund

April 25, 2019

Article X, Section 26 of the North Dakota Constitution covers the Legacy Fund and states “Thirty percent of total revenue derived from taxes on oil and gas production or extraction must be transferred by the state treasurer to a special fund in the state treasury known as the legacy fund.” Taxes on oil and gas production and extraction therefore represent the bulk of the additions to the Legacy Fund. The legislation further states that other sources of revenue can be put into the Legacy Fund, but at this time I am not sure if that ever happened. The additions into the Legacy Fund then are an interesting topic in their own right.

The additions display some variation over time as you can see above. The data start after the oil bust started so it is not surprising to see the early

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Legacy Fund Investment Income

April 24, 2019

So suddenly there are all kinds of public concerns regarding the Legacy Fund. Anybody asking me about it since its inception knows I hate these types of vehicles. They sound good in theory and tend to fail to reach anything close to the theoretical benefits in practice. I voted against it, and I would again. So I am going to break down some of the data about the fund over a series of posts this week.

What is the biggest issue at this point? While the legacy fund represents a significant accumulation of dollar there is absolutely no plan in place, nor has there ever been, for the disposition of those dollars. Some key questions to consider:

Is there a maximum amount for the fund?Are there uses for the funds that are preferred or completely ruled out?Should the state actually

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Its People. Err. Not really

April 23, 2019


Economist and economic historian with an interest in population analysis and demographic methods. Especially interested in natural disasters and disruptions to economic activity and changes in population dynamics, as well as fiscal and monetary policy with forecasting implications. Husband, father, Cubs fan.
View all posts by David

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