Some ugly economic news for North Dakota and other oil states from the Bureau of Economic Analysis today.
First, in the area of personal incomes, North Dakota was one of five states where incomes declined in the second quarter of 2015. “In three of those states, North Dakota (-0.3 percent), West Virginia (-0.4 percent), and Wyoming (-0.4 percent), the decline was the second consecutive decline and was concentrated in mining (which includes oil and gas extraction),” the BEA reports (see full report below).
Second, state unemployment benefit collections more than doubled. “State UI benefits rose 115 percent from the fourth quarter of 2014 to the second quarter of 2015 in North Dakota, 74 percent in Oklahoma, 66 percent in Wyoming, 49 percent in Texas, and 27 percent in West Virginia,” the BEA reports.
But there is some context here. Per numbers from North Dakota Job Service through August of this year, the last month for which numbers are available, the number of employed in the state is down from 2014, but still up 12 percent over pre-oil boom employment levels in 2008.
So yes, as a percentage unemployment benefit payouts are up, but the state had rock-bottom low unemployment previously so any meaningful growth at all is going to look gigantic. And, so far, the state’s employment picture remains pretty strong.
Though layoffs are in the news, low oil prices persist, and things will undoubtedly get uglier in coming months before they get better.
The question on everyone’s mind is, what will the new post-oil boom normal look like? Will we fall back down to pre-oil boom levels of employment or just something that’s lower than boom-era levels?
Nobody really knows, but I suspect the latter. Some are anxious to call this a bust, but I just don’t think that’s in evidence yet.