Newspaper article MinnPost.com

Is Trump Right That Minnesota’s Having Its Best Economic Year Ever?

Newspaper article MinnPost.com

Is Trump Right That Minnesota’s Having Its Best Economic Year Ever?

Article excerpt

Minnesota and its representatives are not an infrequent subject of President Donald Trump’s tweets.

On Tuesday, the president tweeted a vitriolic statement about Minnesota Rep. Ilhan Omar along with a prediction: that he’d win the state in 2020, in part, because “Minnesota is having its best economic year ever.”

It’s well-documented that not everything the president says is true. Is Minnesota’s economy really having its best year ever? Let’s look at the numbers.

(We should note that lots of the data that gives us an idea of how the economy is doing lags behind a bit, so it’s hard to speak definitively about this year. But here’s what we know).

Gross domestic product

Gross domestic product, more commonly known as GDP, is a basic measure of the size of an economy. It looks at the value of goods and services produced and is often used to show how fast an economy is growing or shrinking.

Adjusted for inflation, Minnesota’s GDP is higher than it’s ever been.

But that’s the case nearly every year. Per-capita GDP, which accounts for changes in population, usually grows as labor, capital and materials are used more efficiently over time.

Per-capita GDP for Minnesota, 1997-2018

In the last two decades Minnesota’s per-capita GDP has only decreased during two recessions, a smaller one in the early 2000s and then the big one that started in 2008.

Unemployment

Minnesota’s unemployment rate — the proportion of workers actively looking for jobs — is low right now: a seasonally-adjusted 3.4 percent in June. On average in 2018, unemployment was the lowest it’s been since 1999.

Minnesota average annual unemployment rate, 1976 to 2019

This is good and bad for the economy.

Low unemployment like this should mean employers want to hire workers.

But such low unemployment can constrict the economy: I firms can’t hire as many workers as they’d like to, they can’t produce to their full potential. …

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