Minneapolis Federal Reserve President Narayana Kocherlakota says Minnesota’s economy “weathered the recession notably better” than the national economy.
Kocherlakota made his comments in his first media briefing for Twin Cities news outlets since taking the bank’s helm in October of 2009. Here’s an exerpt of his opening statement:
While Minnesota has clearly felt the pain of the recession, the economy here weathered the recession notably better. State GDP numbers for 2011 are not yet available, but by 2010 the state’s GDP was 1.6 percent above 2007 levels, while national GDP was still 0.3 percent below. Personal income data are available through the third quarter of 2011 and tell a similar story–incomes have recovered faster in Minnesota than they have nationwide. (Through 2011, Q3 inflation-adjusted personal income was 0.2 percent lower than 2007Q4 for the United States, but 1.7 percent above 2007Q4 for Minnesota.)
How does that translate to jobs? Minnesota entered the recession with an unemployment rate of 4.7 percent, slightly below the national rate of 5.0 percent. But Minnesota’s unemployment rate peaked at 8.5 percent in mid 2009, well below the 10 percent national peak. Since then the unemployment rate has fallen to 5.7 percent as of December–more than 2.5 percentage points below the national rate.
Minnesota has also outperformed the nation in terms of the fraction of people employed. As you likely know, Minnesota’s employment-population ratio has historically been considerably higher than the nation’s. Entering the recession, the fraction of people working in Minnesota was 68.9 percent–6 percentage points higher than the national figure of 62.7. According to the most recent data, the Minnesota ratio has recovered to 67.4 percent, almost 9 percentage points above the current national rate.
While Minnesota’s economy has certainly not returned to full health, the state economy is further along in its recovery than the national economy.