Nonfarm employment is forecast to increase at a faster rate in
2000 than in 1999, but at rates below historical averages in most states.
Exceptions include the Upper Peninsula of Michigan, which is predicted
to finish higher than historical average, and North Dakota, where unemployment
is expected to decrease. Employment growth decelerated from 1998 to 1999
and remained below historical averages in all states except the Upper
Peninsula of Michigan.
Unemployment rates are predicted to fall slowly. Unemployment
rates in Minnesota, Wisconsin and the Upper Peninsula of Michigan will
decrease in 2000 to about 50 percent below their historical rates. In
Montana and the Dakotas, unemployment will not change, but will still
finish about 30 percent below their historical rates. From 1998 to 1999
unemployment increased slightly in Minnesota and the Dakotas, remained
unchanged in the Upper Peninsula of Michigan and decreased in the rest
of the region.
Personal income growth will continue to advance moderately. In
2000 personal income is predicted to increase at a faster rate than 1999
for all states except Montana, but will remain below historical growth
rates throughout the district. The below average growth rates primarily
stem from a slowing in price increases rather than a slowing in the growth
of output. Personal income growth accelerated slower from 1998 to 1999
in some areas. Changes in agricultural prices account for volatility in
personal income for North Dakota and South Dakota.
Home building will rebound moderately. In all states, housing
units authorized in 2000 will surpass 1999 levels, except Minnesota and
South Dakota. Most states will remain below historical rates in 2000 except
South Dakota and Wisconsin. From 1998 to 1999, housing units authorized
increased in Minnesota and South Dakota and decreased in Montana, North
Dakota and Wisconsin.
These forecasts come from national and regional models developed at the
Minneapolis Fed, using a statistical procedure known as the Bayesian vector
- For Ninth District forecasts, a range surrounds the point forecasts
for 1998 and 1999 in which the actual value of the projected variable
has a 70 percent chance of falling. No ranges are provided for U.S.
forecasts, because they are the point forecasts on which the regional
models are based.
- The unemployment rate is unemployment as a percent of the labor force,
seasonally adjusted, in the fourth quarter, and its historical average
is computed over the period 4th quarter 1977 through 4th quarter 1997.
All other series are the 4th quarter percent change from the previous
year, and their historical averages are computed from the 4th quarter
year-to-year percent change between 1977 and 1997.
- The percent changes in personal income are computed from data in
Return to: Ninth District economy enters the new year in good shape
See: Ninth District Forecasts