As I consider the current state of the North Dakota economy as well as the economic outlook, I continue to think about labor market issues. Last week on the radio the discussion of wages resonated with the audience, and is obviously a key factor in relieving labor constraints. Realistically, internal demographic issues (low birth rates, outmigration, etc.) and environmental issues (North Dakota winters tend to be cold) could be resolved by appropriate levels for wages. The precise amount of compensating differential is not my target right now, I am just recognizing that such a circumstance could exist.
I argued before that North Dakota is labor-constrained. My thinking on this went through multiple iterations, and I continue to try and refine this. In particular the data to demonstrate this most clearly just may not exist at this time, but I continue to pursue it. Here is the state of wages from Q1 2017 by county in North Dakota.
The Bureau of Labor Statistic released updated data for North Dakota today, and as promised I am posting an update to the data from last week. Not much changed really. The preliminary unemployment rate for December 2016 is 3.0% which is the same as the revised rate for November. The November value was originally 2.9%. We are not going to get upset by a .1% revision.
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.
The growth occurring in North Dakota as a whole, and in most of the sub regions within the states, is quite impressive as media stories no doubt impart. Being a dismal scientist I pointed out many times here and on the Jarrod Thomas Show (1310 KNOX AM, shameless plug I know) that the growth in the oil patch represented a potential constraint on growth in communities like Grand Forks. While many disagreed with me I offer up the following trends that should give people pause.