Oil production, an important driver of North Dakota’s economy, continues to climb. Although rig counts have dropped in recent months, production continues to reach new record levels. August production topped 700,000 barrels per day, an increase of nearly 60 percent in the past twelve months.
The impact of the oil industry on the labor market is apparent when viewing employment and unemployment statistics by metropolitan area. In Bismarck and Minot, cities outside the oil patch but still impacted by the level of oil activity, the unemployment rates are only 2.6 and 2.7 percent, respectively. To the east, unemployment rates in Fargo and Grand Forks are slightly above the state average at 3.2 and 3.9 percent. But in the west, unemployment rates are incredibly low. Dickinson’s unemployment rate is only 1.7 percent and Williston’s is below 1 percent.
A September news release from the U.S. Bureau of Labor Statistics shows that for the month of August, the U.S. average unemployment rate was 8.1 percent. Nevada recorded the highest unemployment rate of any state, with a rate of 12.1 percent. North Dakota’s unemployment rate continued to be the lowest in the nation at 3 percent. Surrounding states all experienced significantly higher unemployment rates – Minnesota at 5.6 percent, Montana at 5.7 percent, South Dakota at 4.4 percent, and Wyoming at 5.1 percent.
Also in September, the Bureau of Economic Analysis released its second quarter 2012 state personal income statistics. North Dakota again led the nation in this important indicator of economic health. Nationally, growth slowed to 1.0 percent during the second quarter. Growth rates for individual states ranged from a low of .4 percent in New Mexico to a high of 2.1 percent in North Dakota. Again, North Dakota far outpaced most of its neighboring states where growth rates were only .9 percent in Minnesota, .7 percent in Montana, and .6 percent in Wyoming. South Dakota, however, ranked second in the nation and experienced robust personal income growth of 2 percent between the first and second quarters of this year.
Rod Backman, CPA, CFP
Covenant Consulting Group
Go to the View Issues page and click on October 2012 to view a table showing a variety of economic measures at the local and national level.
