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Contact: Patti Lorenzen
Media Representative
612-204-5261
Patti.Lorenzen@mpls.frb.org

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Minneapolis Fed expects steady economic growth for 2013

MINNEAPOLIS, January 3, 2013—Federal Reserve Bank of Minneapolis

Minneapolis Fed Forecasts Above-Average Growth for Minnesota in 2013

The 2013 economic outlook from the Federal Reserve Bank of Minneapolis calls for continued growth in the Minnesota economy. Based on the Minneapolis Fed’s statistical model, employment in Minnesota is expected to grow by a solid 2.2 percent, while the unemployment rate is predicted to drop to 4.7 percent in the fourth quarter of 2013. Growth in personal income is expected to exceed 5 percent.

“The Minnesota economy continued on its upward trend in 2012, and it looks like growth could accelerate in 2013,” said Toby Madden, regional economist at the Minneapolis Fed.

In addition to the forecasting model, the Minnesota outlook includes information from the annual fedgazette business outlook poll of 335 district businesses and the annual manufacturing survey of 542 district manufacturers. The poll and survey were mailed out the day after the November election and returned by Dec. 6. The Ninth District includes Minnesota, Montana, North and South Dakota, northwestern Wisconsin and the Upper Peninsula of Michigan.

“The statistical model points to solid economic performance in 2013; however the outlook poll is less clear,” Madden said. “Businesses are upbeat for their own operations and are mixed about the state economy. Metro area companies expect more growth than those in greater Minnesota.”

The surveys of business leaders and manufacturers indicate that businesses expect more sales and production in 2013 and will accomplish this through increased employment and capital investment. They also expect to raise prices.

In regard to the state economy, both the surveys and the statistical model see increases in housing construction. Respondents from the metro area are optimistic and expect employment and consumer spending to rise. However, manufacturers and firms in greater Minnesota are more pessimistic. Manufacturing survey respondents expect most state indicators to be down, while business leaders from greater Minnesota expect flat employment and decreased investment and consumer spending.

The statistical model does not incorporate U.S. fiscal policy decisions. More details on the 2013 economic forecast for Minnesota and the Ninth District can be found in the January issue of the fedgazette, the Minneapolis Fed’s quarterly newspaper, as well as at minneapolisfed.org.

2013 Economic Outlook Briefing:
Video and Presentation

The Federal Reserve Bank of Minneapolis is one of 12 regional Reserve Banks that, with the Board of Governors in Washington, D.C., make up the Federal Reserve System, the nation’s central bank. The Federal Reserve Bank of Minneapolis is responsible for the Ninth Federal Reserve District, which includes Montana, North and South Dakota, Minnesota, northwestern Wisconsin and the Upper Peninsula of Michigan. The Federal Reserve Bank of Minneapolis participates in setting national monetary policy, supervises numerous banking organizations, and provides a variety of payments services to financial institutions and the U.S. government.

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Minneapolis Fed Forecasts Moderate Economic Growth for Montana in 2013

The 2013 economic outlook from the Federal Reserve Bank of Minneapolis calls for moderate growth in the Montana economy. Based on the Minneapolis Fed’s statistical model, employment in Montana is expected to grow by a moderate 1.2 percent, while the unemployment rate should drop to 5.6 percent in the fourth quarter of 2013.

“The economy in Montana grew at a solid pace in 2012, but it looks like the pace of growth will slow in 2013,” said Toby Madden, regional economist at the Minneapolis Fed.

In addition to the forecasting model, the Montana outlook includes information from the annual fedgazette business outlook poll of 335 district businesses and the annual manufacturing survey of 542 district manufacturers. The poll and survey were mailed out the day after the November election and returned by Dec. 6. The Ninth District includes Minnesota, Montana, North and South Dakota, northwestern Wisconsin and the Upper Peninsula of Michigan.

“The surveys and the statistical model both suggest moderate economic gains for Montana in 2013,” Madden said. “Manufacturers and business leaders are somewhat optimistic for the state economy.”

Montana respondents to the manufacturing survey expect flat economic growth and business investment. They also expect slight increases in overall employment and some decreases in consumer spending. Montana respondents to the business outlook poll expect relatively flat employment and slight increases in consumer spending and larger increases in business investment. Both surveys expect moderate increases in wages and benefits.

However, businesses are more upbeat about their individual operations, with both manufacturers and business leaders expecting more sales and production in 2013. They will accomplish this through increased capital investment and higher prices.

The statistical model does not incorporate U.S. fiscal policy decisions. More details on the 2013 economic forecast for Montana and the Ninth District can be found in the January issue of the fedgazette, the Minneapolis Fed’s quarterly newspaper, as well as at minneapolisfed.org.

2013 Economic Outlook Briefing:
Video and Presentation

The Federal Reserve Bank of Minneapolis is one of 12 regional Reserve Banks that, with the Board of Governors in Washington, D.C., make up the Federal Reserve System, the nation’s central bank. The Federal Reserve Bank of Minneapolis is responsible for the Ninth Federal Reserve District, which includes Montana, North and South Dakota, Minnesota, northwestern Wisconsin and the Upper Peninsula of Michigan. The Federal Reserve Bank of Minneapolis participates in setting national monetary policy, supervises numerous banking organizations, and provides a variety of payments services to financial institutions and the U.S. government.

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Minneapolis Fed Forecasts Robust Economic Growth for North Dakota in 2013

The 2013 economic outlook from the Federal Reserve Bank of Minneapolis calls for continued strong growth in the North Dakota economy. Based on the Minneapolis Fed’s statistical model, employment in North Dakota is expected to grow by a faster-than-average 3.6 percent, while the unemployment rate should drop to 2.8 percent by the fourth quarter of 2013. Over 4 percent growth in personal income is expected.

“The oil and natural resource boom drove the North Dakota economy higher in 2012, and we expect robust growth for 2013,” said Toby Madden, regional economist at the Minneapolis Fed.

In addition to the forecasting model, the North Dakota outlook includes information from the annual fedgazette business outlook poll of 335 district businesses and the annual manufacturing survey of 542 district manufacturers. The poll and survey were mailed out the day after the November election and returned by Dec. 6. The Ninth District includes Minnesota, Montana, North and South Dakota, northwestern Wisconsin and the Upper Peninsula of Michigan.

“The surveys and the statistical model both point to solid economic performance in 2013,” Madden said. “Businesses are very optimistic for their own companies and expect solid growth in North Dakota.”

The surveys of business leaders and manufacturers indicate that businesses expect a good year with more sales and production in 2013, which may drive increased employment and capital investment. They also expect to raise prices.

When asked about their state economy, North Dakota respondents were optimistic and expected increased employment, business investment and consumer spending. They expected above-average increases in wages and benefits.

The statistical model does not incorporate U.S. fiscal policy decisions. More details on the 2013 economic forecast for North Dakota and the Ninth District can be found in the January issue of the fedgazette, the Minneapolis Fed’s quarterly newspaper, as well as at minneapolisfed.org.

2013 Economic Outlook Briefing:
Video and Presentation

The Federal Reserve Bank of Minneapolis is one of 12 regional Reserve Banks that, with the Board of Governors in Washington, D.C., make up the Federal Reserve System, the nation’s central bank. The Federal Reserve Bank of Minneapolis is responsible for the Ninth Federal Reserve District, which includes Montana, North and South Dakota, Minnesota, northwestern Wisconsin and the Upper Peninsula of Michigan. The Federal Reserve Bank of Minneapolis participates in setting national monetary policy, supervises numerous banking organizations, and provides a variety of payments services to financial institutions and the U.S. government.

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Minneapolis Fed Forecasts Moderate Economic Growth for South Dakota in 2013

The 2013 economic outlook from the Federal Reserve Bank of Minneapolis calls for continued economic growth in the South Dakota economy. Based on the Minneapolis Fed’s statistical model, employment in South Dakota is expected to grow by a moderate 1.1 percent, while the unemployment rate should drop to 4.1 percent in the fourth quarter of 2013. Almost 5 percent growth in personal income is expected.

“The South Dakota economy grew at a modest pace in 2012, and we expect slightly faster growth for 2013,” said Toby Madden, regional economist at the Minneapolis Fed.

In addition to the forecasting model, the South Dakota outlook includes information from the annual fedgazette business outlook poll of 335 district businesses and the annual manufacturing survey of 542 district manufacturers. The poll and survey were mailed out the day after the November election and returned by Dec. 6. The Ninth District includes Minnesota, Montana, North and South Dakota, northwestern Wisconsin and the Upper Peninsula of Michigan.

“The surveys and the statistical model both point to economic growth in 2013,” Madden said. “Businesses are optimistic for their own operations and expect some improvement in South Dakota.”

The surveys of business leaders and manufacturers indicate that businesses expect more sales and production in 2013 and will hire more employees. They also expect to raise prices.

When asked about their state economy, South Dakota respondents to the business outlook poll said they expect increased overall consumer spending, employment and business investment. They also expect rising prices.

The statistical model does not incorporate U.S. fiscal policy decisions. More details on the 2013 economic forecast for South Dakota and the Ninth District can be found in the January issue of the fedgazette, the Minneapolis Fed’s quarterly newspaper, as well as at minneapolisfed.org.

2013 Economic Outlook Briefing:
Video and Presentation

The Federal Reserve Bank of Minneapolis is one of 12 regional Reserve Banks that, with the Board of Governors in Washington, D.C., make up the Federal Reserve System, the nation’s central bank. The Federal Reserve Bank of Minneapolis is responsible for the Ninth Federal Reserve District, which includes Montana, North and South Dakota, Minnesota, northwestern Wisconsin and the Upper Peninsula of Michigan. The Federal Reserve Bank of Minneapolis participates in setting national monetary policy, supervises numerous banking organizations, and provides a variety of payments services to financial institutions and the U.S. government.

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Minneapolis Fed Forecasts Slow Economic Growth for the Upper Peninsula in 2013

The 2013 economic outlook from the Federal Reserve Bank of Minneapolis calls for continued slow growth in the Upper Peninsula of Michigan economy. Based on the Minneapolis Fed’s statistical model, employment in the U.P. is expected to grow by a sluggish 0.3 percent, while the unemployment rate should drop to 7.9 percent in the fourth quarter of 2013.

“The U.P. economy expanded at a slow pace in 2012, and this should continue in 2013,” said Toby Madden, regional economist at the Minneapolis Fed.
In addition to the forecasting model, the U.P. outlook includes information from the annual fedgazette business outlook poll of 335 district businesses and the annual manufacturing survey of 542 district manufacturers. The poll and survey were mailed out the day after the November election and returned by Dec. 6. The Ninth District includes Minnesota, Montana, North and South Dakota, northwestern Wisconsin and the Upper Peninsula of Michigan.

“The surveys and the statistical model point in different directions for U.P. economic performance in 2013,” Madden said. “The statistical model expects slow growth, while the survey respondents expect decreased activity.” When asked about their state economy, U.P. respondents expected decreases in business investment, consumer spending, economic growth and profits.

Business leaders are more optimistic about their own operations, as they expect increased sales and investment, but declines in employment. Respondents to the manufacturing survey expect increases in productivity, but some declines in orders and employment.

The statistical model does not incorporate U.S. fiscal policy decisions. More details on the 2013 economic forecast for the U.P. and the Ninth District can be found in the January issue of the fedgazette, the Minneapolis Fed’s quarterly newspaper, as well as at minneapolisfed.org.

2013 Economic Outlook Briefing:
Video and Presentation

The Federal Reserve Bank of Minneapolis is one of 12 regional Reserve Banks that, with the Board of Governors in Washington, D.C., make up the Federal Reserve System, the nation’s central bank. The Federal Reserve Bank of Minneapolis is responsible for the Ninth Federal Reserve District, which includes Montana, North and South Dakota, Minnesota, northwestern Wisconsin and the Upper Peninsula of Michigan. The Federal Reserve Bank of Minneapolis participates in setting national monetary policy, supervises numerous banking organizations, and provides a variety of payments services to financial institutions and the U.S. government.

Top

Minneapolis Fed Forecasts Improved Economic Activity in Northwestern Wisconsin in 2013

The 2013 economic outlook from the Federal Reserve Bank of Minneapolis calls for accelerating growth in the northwestern Wisconsin economy. Based on the Minneapolis Fed’s statistical model, employment in the whole state of Wisconsin is expected to grow by a faster-than-average 1.3 percent, while the unemployment rate should drop to 5.6 percent in the fourth quarter of 2013. Over 4 percent growth in personal income is expected.

“The economy in Wisconsin grew at a sluggish pace in 2012, but the forecast model expects some acceleration in 2013,” said Toby Madden, regional economist at the Minneapolis Fed.

In addition to the forecasting model, the Northwestern Wisconsin outlook includes information from the annual fedgazette business outlook poll of 335 district businesses and the annual manufacturing survey of 542 district manufacturers. The poll and survey were mailed out the day after the November election and returned by Dec. 6. The Ninth District includes Minnesota, Montana, North and South Dakota, northwestern Wisconsin and the Upper Peninsula of Michigan.

“While the statistical model expects accelerating growth, survey respondents from northwestern Wisconsin are a bit more cautious for growth in 2013,” Madden said. “Business leaders see solid growth at their own companies, but are pessimistic about the state economy.”

When asked about their state economy, respondents expected flat to lower activity. Business leaders expected decreases in business investment and consumer spending. Northwestern Wisconsin respondents to the manufacturing survey expected flat economic growth and lower overall corporate profits.

However, businesses are more optimistic about their individual operations, as both manufacturers and business leaders expect more sales and some employment gains in 2013.

The statistical model does not incorporate U.S. fiscal policy decisions. More details on the 2013 economic forecast for Wisconsin and the Ninth District can be found in the January issue of the fedgazette, the Minneapolis Fed’s quarterly newspaper, as well as at minneapolisfed.org.

2013 Economic Outlook Briefing:
Video and Presentation

The Federal Reserve Bank of Minneapolis is one of 12 regional Reserve Banks that, with the Board of Governors in Washington, D.C., make up the Federal Reserve System, the nation’s central bank. The Federal Reserve Bank of Minneapolis is responsible for the Ninth Federal Reserve District, which includes Montana, North and South Dakota, Minnesota, northwestern Wisconsin and the Upper Peninsula of Michigan. The Federal Reserve Bank of Minneapolis participates in setting national monetary policy, supervises numerous banking organizations, and provides a variety of payments services to financial institutions and the U.S. government.

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