The radio audience is concerned with inflation, and rightly so. It is a big deal and it carries serious consequences with it. While most news coverages discusses the issue of inflation expectations coming unanchored there is a more practical concern happening at the consumer level: the relative costs are changing and making budget calculations more difficult.

We have not seen this type of inflation in decades and the consumer is looking for ways to manage the idea that some prices are increasing by more than others. This is a practical problem seemingly less noticed in the media coverage right now. The focus on gas prices is important and the general recognition that paychecks do not buy what they did before is correct, but shifting price markers is difficult to manage too.

I remain convinced that policy has very little chance to impact gasoline prices in anything approaching a meaningful way anytime soon. However I am surprised I am not hearing more about the most obvious solution: a temporary suspension of the federal fuel excise taxes. As of July 1, 2021, according to the Energy Information Administration (EIA), these federal taxes amounted to 18.4 cents per gallon for gasoline and 24.4 cents for diesel.

You can make this a temporary tax cut of say, 3 months? This would be a nod to the various difficult political angles it would represent with an approaching election. That takes it out to June when futures prices start a decline, albeit a gradual one.

Is this a significant amount? Not really. But it can add up over time. If states follow

I expect that gas and oil prices are on the mind of many radio callers these days. It is an important question because gas is one good people cannot substitute away from easily in the short run. At the very least then the perceived budget impacts are, in the short run, quite high. All data used here come from EIA.gov.

So in terms of where we start with this topic let’s take a look at two graphs, one for WTI oil price and the Midwest PADD gas prices.

There is plenty of volatility for oil prices as most people living through these times would know. So let’s take a look at gasoline prices.

The shape of the graph is almost exactly the same as the WTI graph. So from looking at the two graphs we surmise they have similar movements. By the way, the rapid increase at the end of

I read a recent article by the Economist magazine and it was very interesting. Essentially it detailed the various ways China, or any other country for that matter, can use to evade trade sanctions. (I am not linking to it because I am sure it is behind a paywall). Paired with the information that China did not meet the terms of the Phase 1 trade deal negotiated with President Trump, and that the Biden administration is continuing to negotiate on the deal, I thought I would look at the data for the radio audience.

I look at two time periods, one from 1985 to the end of 2021 and one from 2012 to 2021. These are not magic dividing lines. I simply wanted a longer time series and a more recent one.

The long trend is clearly for more trade with China overall and imports far

David

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

Inflation is a concern on the minds of many right now. Let’s get it out of the way right now, this is both a simpler problem than some make it out to be, and simultaneously more complicated. There are not necessarily easy answers to address this issue and certainly not immediate answers. Headlines right now talk about the highest inflation measures in 40 years. Fair enough, but what if we look just beyond this headline grabbing, and purely artificial time horizon?

Just beyond that 40 year window is a period of significantly higher inflation. (I calculated this as the YOY percent change in the CPI.) What do we take away from this then? We are coming off a very long period of lower, stable inflation. That period was preceded by much higher inflation levels. Are we seeing a return

Part of COVID fatigue comes from, I believe, the various metrics used to explain the severity of the pandemic. All of these have their uses but I think, at times, lacked context for the public. Positivity rates matter and had impact, but when it did not translate clearly into other issues it became a less effective metric. The same could be said for all of these. Hospital bed availability was a metric I thought would/could resonate, but it was abandoned early.

To some extent this ended up creating a sense that the pandemic was not “real.” Most of us probably read stories about sick people, sometimes critically or terminally, expressing surprise at the course of their illness. We are far enough into the pandemic situation now that some are calling for a change in term to

I aggregated the COVID statistics from the North Dakota Dashboard into monthly numbers for the state as a whole. A few quick takeaways include that COVID continues to spread and is in fact at its highest level yet in the state. The positivity rate is not much better as you can see below as well.

A monthly positivity in excess of 15% is pretty lousy, but that is where we are at for January 2022 so far.

Some will look at this and say the spread plus vaccination is pushing us closer to herd immunity. I am not a big believer that is going to happen at this point with the pace of variants. Essentially we would see the COVID response start to resemble an annual flu shot type process.

How this impacts factors like labor markets and the movement of goods is still evolving,

With the current inflation situation the Fed signaled pretty clearly there will be forthcoming increases in rates. The total number of increases? The end goal for the fed funds rate? Those are not entirely clear, but let’s start with the a look at the historical data, the long history. For the next graphs do pay attention to the rate axis (y), it changes as we narrow time, and that is part of the reason for the different graphs.

The Fed Funds rate is at historic lows and has been for much of the 21st century. Yes some of the declines were responses to financial crisis and COVID though we will address these in a bit. My reason for showing the above graph is simply to cut off the doomsayers suggesting increases are problematic. I think they are overdue. Let’s look at a narrower

Business conditions and the return to “normal” (hardly an objective term) are a frequent topic of discussion on the radio. The Census Bureau conduct a survey and it does break it out by state looking at business conditions relative to pre-pandemic circumstances as well as other questions.

I am pulling out some of the highlights from the survey round complete 12/26/2021. So what did I learn? About the same percentage of firms report no issues with hiring employees as those that report issues in the week prior to the survey. 40% of respondents reported delays from domestic suppliers.

40% of business reported large increases in prices paid for goods and services compared to pre-March 13, 2020 levels. 63.3% of businesses also report little or no change in demand for their

Inflation and labor markets dominate the news right now, and this is probably appropriate in terms of the concerns of most people calling the radio. There are worries about prices and the erosion of purchasing power, and then broader concerns about the health and status of the labor market. The broader concerns are not necessarily directly personal, focusing at times on worries about the overarching success possible if there is a market that does not work.

In this post I take a look at the JOLTS labor data for North Dakota in particular. The longer record of this data shows a significant degree of stability over time with a predictable set of changes during the onset of COVID. It was temporary in the same way that other measures were temporary though.

We should not make too

In the last post I looked at births (find it here). I ended by pointing out the population of women could be different due to the underlying oil boom North Dakota experienced at that time. So there are a few ways we might see some changes. We might see some changes for a given year within a certain age category. The next graph plots this out for us to see.

There is some change in shape age specific fertility rate from year to year, however the shape remains largely the same. Clearly there is a bit of an increase and then decrease over time, much like we saw in some of the other charts from the other post. A better representation is to look at the age categories over time like in this next plot.

When we take a look it is interesting to see the 25-29 fertility rate actually

There is nothing like a good conference to stimulate the mind and motivate you, even when that conference is online and 7 hours ahead. That issue aside it was great hearing the discussions about “Pandemic babies” and COVID impacts on births. I am not going to get into that discussion yet, but turn the focus back to pre-COVID and fracking effects.

The oil boom in North Dakota was a transformational event. I think very few, if any, dispute that point. The demographic impacts are still unclear though. For example, we know births in the state went up.

The annual number of births increased for about 7 years, and then plateaued, and declined. These changes would seem to be, at some level, consistent with economic fluctuations around oil prices at the time. The situation becomes

Forecasting local area sales tax collections is not the easiest. The smaller the area gets the more variables you might leave out, due to lack of data or perhaps the variable did not matter in the past. New businesses, population changes, decisions by people to “shop local” more can all impact local sales tax collections. But does that stop us? No! Why should it?

So with that in mind I offer up my forecast for the next 24 months for Grand Forks sales tax collections. We can see some serious fluctuations from month to month but the monthly growth in sales tax over this 0.9%.

There are some other model versions to test and play around with but this is the better model choice at the time, so I use its predictions. So in terms of the fiscal resources for the city of Grand Forks

Even before COVID there were concerns about the trajectory of births in the US. It seemed people were having fewer and fewer children, something the various issues surrounding COVID did not deter, at least in terms of the speculation. It is only recently that we acquired data allowing us to see if COVID is changing individual behavior.

A little side note here. Many of the speeches and presentations I give are to non-technical audiences and when talking about births you often talk about the activity leading to the birth. You know….sex. This does not always go over well with the non-tech audience so I use the term “family formation activity”. The interesting thing is that this can only refer to, you know, sex, but the audience laughs at this term while they shift in their seat

I have not seen this much of the Greek alphabet since taking ancient Greek in high school. But seriously, can we recognize finally that pandemic concerns are the significant factor moving the economic narrative? Those that keep asking when is the economy going to get back to “normal” need to ask when COVID will stop being a story that moves markets and policy.

This is a serious issue. Oil prices came down drastically as it seems demand for oil would be reduced due to the emergence of the new variant. This will raise further questions, about public willingness to attend events, shop in stores, go out to dinner, and so on. It is a serious issue with a lack of serious discussion around it right now.

From a forecasting perspective the world, to some extent, resets with the

Like most regions the West North Central (WNC), which includes North Dakota, experienced inflation over the last year. That’s right, the last year. Let me say plainly, inflation is not a phenomenon of the last month, or even 6 months. Inflation started its current upward ascent in June of 2020 and has not looked back, and only gained momentum.

This region is in the center of the country which poses a few problems, particularly the supply chain. When you hear about all kinds of goods delayed at ports this region is about as far away from those ports as you can be and still be in the country. In short, you are pretty much at the end of the supply chain.

Unfortunately that means the price effects from supply chains disruptions are likely to be greater and last longer.

David

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

It is a regular topic of conversation, how are we going to get more workers in Grand Forks. First, let’s address the situation with employment.

We can see that employment remains well below the 2019 level and that the situation in Grand Forks is complicated. Earlier this year employment was above the immediate impact of the pandemic and is returning to the pattern of 2019 and late 2020. This still puts us about 2,000 employed below the level of 2019.

Back to the question at hand: where do we get workers. There are a few options we can consider. Any business can try to bring new workers into the area from outside the region. This is the option most often thought of and discussed when economic development considerations ate the topic of conversation. Another option is to

Despite COVID fatigue hitting everyone the disease is still present. The recent availability of vaccine doses for ages 5-11 seems a good reason to look at the data for the young. I aggregate the case data from the daily level to monthly and take a look comparing the months.

As mentioned in prior posts it is not a surprise to see the cases count for the youngest age range to be up because more kids are in school, that is, fewer are in some kind of remote option. More kids is a public setting, even with safety precautions, will create more cases. This is not the end of the story though. What is at least equally important is the percentage of cases that are in this age group.

Once again we see the percentage for the youngest age group reached a new pandemic peak. A large chunk

Radio discussion today discussed, among other topics, whether or not the economy could be growing when fast food places needed to close at 4pm on Sunday. North Dakota dealt with this problem before, notably during the rapid rise of the oil industry in the state. We need to confront facts about labor markets right now. Workers have preferences and, apparently, some degree of market power right now. These are leading to changes in labor allocation decisions. We had the Great Recession, the Great Resignation, so think of this situation really as the Great Reallocation.

Yes there have been retirements, and some early retirements, but many of these were likely hanging on longer than you might expect anyway. Translation: you should anticipate their attachment to work had some

I have not posted about oil lately, perhaps for obvious reasons. The COVID-led decline is still a thing, though off the low levels of the past. What does this situation look like?

Current production amounts go back to 2018 levels really (that is the last time we hit those levels on the upswing). We are off the lows of the COIVD decline though, which is clearly a good thing. The graph here is alright, but I think looking at the percentage change from year ago levels will be more helpful.

When we look at the percentage change from the prior year we see some nice ups and downs of a growing industry that matures and hits some bumps in the road. Even some of the declines are still declines that end up in positive growth territory. Remember with this graph that anything above the

It is fun with data time. I am looking at the time until scoring goals for the University of North Dakota, comparing the 2020 season and the 2021 season. This is time of the season, in minutes, and right now is through game 7 of the season. This gives us insight into stretches of time with no scoring. This would be characterized by flat stretches of the graph. Probably just easier to show you.

The blue line is the 2020 season (last year) and the green line represents the 2021 season. So the most interesting thing I see so far is multiple crossings of the graphs meaning the goal scoring between the two seasons does vary, with great leaps in goal scoring between 100 minutes and 200 minutes of season time last year, and steadier performance this year. Obviously there are a few

A pivot to the demographic seems in order right now. Labor force, COVID, economic growth, and most other topics I discuss here and on the radio depend on population growth. I say it often, population is the most significant binding constraint on the economy of North Dakota right now. “We need more labor” is a mantra from most business sectors, but we are not getting there without more population. Right now if one business in one location in North Dakota increases employees, it is likely the case that another business somewhere in the state lost that same worker. Today’s post focuses on natural increase, that is births in North Dakota less the deaths. Migration is the other part of the population puzzle but we will separate that out for another discussion another day. Let’s look at

On the radio this week we will discuss inequality which is a really hot issue though I think large parts of the public discussion, at times, miss the point. I generate a bar chart for the income distribution for the US and ND in 2019 with the 5 year ACS data set. This is mostly for comparison sake in terms of how the US and ND compare in the percentage in different categories. Now I am not pretending I have “answers” in the sense that I address and solve questions related to distributions and the issues they present. However I am going to predict some discussion points from radio callers.

If we reallocated so everyone was equal would that be the same in 1 year?

I get asked this a great deal and the answer is I have no real idea, but the real answer is probably not. Some

The radio audience is often interested in labor market matters such as wages and employment. The September “Employment Situation” from the Bureau of Labor Statistics (available here) makes it clear COVID adjustments still impact the data. We need to confront not just sharp breaks in the data series, but actual changes in preferences for work and other structural adjustments. This situation is not likely to fully resolve itself anytime soon.

I find it helpful, usually, to compare the North Dakota data to the broader US picture at these times. The two, while often telling similar stories, are not often telling identical stories.

For each data series I include the actual data and a smoothed series (loess method). The recent data make it clear there is a significant downward

The debt limit debate is the most significant economic discussion currently and it seemed appropriate to put out a brief bit of information about it for the radio audience. As the discussion at the national level is mind-bogglingly political at this point (read that as trying to blame the other side for all of it) I thought it good to put out some basic information.

The larger aspects of the debate get at political parties and preferred economic policy approaches. Currently Democrats favor spending plans and approaches while Republicans favor tax cuts. The fact that, for the most part, both parties ignore the other side of the fiscal policy toolkit pretty much explains why we are where we are. So let’s briefly look at the situation we have in terms of the fiscal policy space:

David

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

It is important to keep track of the COVID data because we are clearly not done with COVID yet and if new variants keep arising it seems likely it will be some time before we are done with it. The total cases are falling into a fairly clear seasonal pattern (seen below) though August and September case numbers are above the levels from the same moths in 2020.

Where there is a more worrying trend is with the younger population, a significant number of whom do not have access to vaccines yet. The under 20 population in September accounted for 30% of the total cases of COVID 19.

Circumstances make this skyrocketing percentage somewhat predictable. There are more students in school this year in the K-12 setting. There are more students on the college campuses as well. The

[unable to retrieve full-text content]The continuing claims data for ND make it clear that enhanced unemployment benefits were not keeping people from working in ND.