This is a little more macro/money than much of the stuff I post here but it seems to be something people miss sometimes. The Federal Reserve drastically lowered rates in response to the unfolding financial crisis in 2008 and later. Those rates remain low today, essentially set between 0.0 and 0.25%. Despite this range the rate is effectively staying at or below 0.1%, but that is not what I am addressing today.
I have not looked at oil production time series for North Dakota in a while so I thought it time to take a look. Oil production, in fact most commodity production, and certainly extractive production, has an interesting cost structure. There are significant fixed cost elements to cover in order to generate profit. Notice in the graph below that while price starts rising around 2000, it was not until around 2005 that production started to rise. As the price continues to rise we see production continue to increase too.
The Bureau of Labor Statistics (BLS) released data on employment and unemployment from the Current Employment Statistics survey. North Dakota was number one in the country with a 4.4% increase in total nonfarm employment from year ago levels. That is 12 consecutive months where the year-over-year percent change was at or above 3%, and something like 55 months in a row that the number was positive. This is a pretty stellar performance.
Housing remains a frequent topic of discussion for people in North Dakota. Most of the discussion falls under the heading of “affordability”, a suitably vague term essentially guaranteeing little to no progress on the issue, if it is a problem at all. What is the affordability issue? My suspicion is that people are thinking of something similar to the following graph:
So J.T. and I discussed my post on tobacco bonds while I was on the radio today. One of the things that amazed him, and me too, was the notion the rate of smoking fell more than assumed. So, doing what I do, I went online and got some data, this time from the OECD.