Beige Book – North Dakota Information

The Federal Reserve released the Beige Book today, which is a summary of their comments on economic conditions. The report contains information related to each district, and there is some information specific to North Dakota mentioned in the Book. I am just highlighting a few of the more notable elements here. The link to the full report is above.

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Economic Diversification in North Dakota and the United States

In a post last week I compared the allocation of economic activity in North Dakota with the United States. North Dakota has a larger share of activity in agriculture and extractive industries, but less in industries like information. There are many factors that influence the share of economic activity including resource endowments, transportation networks, and the list goes on. Consequently you need to be careful drawing policy conclusions from differences in allocations between two geographies. It could be very easily explained by resource endowments, such as oil in the ground.

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The Beige Book for May

For those that do not know, this is the name of the Fed’s regional condition summary (available here). The Ninth District summary (which includes North Dakota) concludes that economic performance is mixed. Strength came from manufacturing, energy and mining, consumers, and a few others. The weaker sectors included construction, farming and real estate.

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Shutdown and Equity Values

Reminder: I am not giving trading advice, just my interpretation.

Some of my students wondered why equity markets are not down more and at times look to potentially increase. Equity markets are an imperfect reflection of future economic prospects because there are company specific issues that could dominate national negatives.

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