Minnesota’s Economic News — W/E 7/1/22
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I’ve written before about how Minnesota’s economic growth has lagged that of the United States generally. Numbers from the Bureau of Economic Analysis (BEA), released last week, show that that continues to be the case.
In the third quarter of 2019 Minnesota’s economy grew at an annualized rate of 2.0% compared to a national rate of 2.1%. It was the fourth consecutive quarter that our state’s GDP grew at a slower rate than that of the United States generally and ranked us 27th out of the 50 states and D.C..
A difference of 1.0 percentage pints might not sound like much, but compounded over time it adds up. Over the last four quarters, Minnesota has lagged national growth by an average of 1.1 percentage points. If that continued over five years, say, it adds up to growth 24.5% lower.
The BEA has data on state quarterly real GDP growth going back to the start of 2005. In the 23 quarters from then until the end of 2010, Minnesota’s annualized growth rate was faster than the U.S. rate in 48% of them. In the 35 quarters since the start of 2011, Minnesota’s annualized growth rate was faster than the U.S. rate in just 46% of them.
There are those who say that this is the result of ‘convergence’, that Minnesota’s economy is growing relatively slowly because it is already relatively rich. As I’ve written before, the data does not support this.
If you are interested in finding out more about economic growth in Minnesota, its record, causes, and prospects, take a look at our report, ‘The State of Minnesota’s Economy: 2018‘.
Last year, we wrote that Minnesota’s economic performance had been ‘unimpressive‘. In 2017, we described it as ‘lackluster‘. In 2016, it was ‘mediocre‘. Perhaps we are saying the same old thing over and over again, but the data keeps on giving us the same old story over and over again.
Sadly, these latest numbers confirm that we are going to have to revisit the thesaurus again this year, looking for yet another synonym of ‘not all that good’.
John Phelan is an economist at the Center of the American Experiment.