Minneapolis Fed Forecasts a Slower Growing Economy in the Ninth District for 2008
Minneapolis, December 18, 2007— The Federal Reserve Bank of Minneapolis is expecting a growing, albeit slower, economy in the Ninth Federal Reserve District in 2008, according to the annual regional economic outlook announced today. The annual forecast includes information from the Minneapolis Fed's statistical forecasting models, results from the fedgazette's annual business conditions outlook poll of 328 district business leaders, a survey of 576 district manufacturers conducted by the Minneapolis Fed and the Minnesota Department of Employment and Economic Development, and a survey of 132 district agricultural lenders.
Employment—The outlook points to mild employment growth. Slower employment growth is expected compared to 2007 in Minnesota, Montana and South Dakota, with somewhat faster growth in North Dakota and Wisconsin. District business leaders in the service sector anticipate increasing employment; however, the construction sector expects slightly lower levels of employment. Business leaders report that labor market tightening may have reached a plateau over the past year, which is consistent with the bank's forecast that unemployment rates will remain about the same as 2007 levels.
Wages and Prices—Wage growth of 3 percent or below is anticipated throughout the district. Personal income is predicted to increase in 2008, but not as fast as in 2007, and consumer spending is expected to slow.
- Agriculture—Generally positive outlook with good field conditions and strong estimated demand and prices. Producers are concerned, though, that big increases in input costs will hurt profit growth.
- Manufacturing—District manufacturers anticipate employment growth and robust gains in sales.
- Home building—The downward trend in the housing sector is expected to continue.
The forecast in detail, including state-by-state forecasts:
Media Briefing Presentation [Powerpoint]
Articles published in the January 2008 fedgazette:
Mixed bag for 2008, Business Poll
Good times for agriculture
As one of the 12 Federal Reserve Banks, the Federal Reserve Bank of Minneapolis contributes to a variety of Federal Reserve System functions, including operation of a nationwide payments system, distribution of the nation's currency and coin, supervision and regulation of member banks and bank holding companies, and serving as a fiscal agent for the U.S. Treasury. Additionally, the president of the Minneapolis Fed serves as a member of the Federal Open Market Committee, the monetary policymaking arm of the Federal Reserve's Board of Governors. Together with its branch in Helena, Mont., the Minneapolis Fed serves the Ninth Federal Reserve District, which includes Minnesota, Montana, North and South Dakota, 26 counties in northwestern Wisconsin and the Upper Peninsula of Michigan.