Exchanging & Engaging Ideas in Economics & Economic History
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.
I field a significant number of questions about the pace of economic activity in North Dakota, specifically the oil patch, from individuals not in the state or even the region. The answer I usually want to provide is summed up here:
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.
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.
I get many queries about data related to North Dakota. Sometimes the questions focus on national data and the implications for the North Dakota economic environment. Other times the questions relate more to the internal dynamics and workings of North Dakota. These questions come from all sectors and all types of businesses.
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.