How inflation takes a bite out of your Domino’s carryout
Inflation is running at its fastest rate, year over year, since June 1982. Generally, people see this in the form of rising prices. But that is only part of the…
Yesterday, the Bureau of Economic Analysis (BEA) released its estimates Gross Domestic Product (GDP) growth by state for the fourth quarter of 2019 and its preliminary estimate for the year.
In the fourth quarter, Minnesota’s economy grew by 1.6% in real terms, as the figure below shows. This was below the national rate of 2.5% and ranked us 38th out of the 50 states and District of Columbia. Our growth rate has now lagged the national rate in four of the last five quarters, in the fifth it matched it.
Is this a new trend? The BEA has quarterly GDP data by state going back to the start of 2005. In the 23 quarters between then and the end of 2010 (2005:Q1-:Q2 to 2010:Q3-:Q4), Minnesota’s GDP grew at a faster rate than that of the US in 48%. In the 36 quarters since (2010:Q4-2011:Q1 to 2019:Q3-:Q4), our state’s economy has grown at a faster rate than that of the US in 44%.
The numbers for 2019 are only preliminary. They are subject to revision and these can sometimes be quite large.
These preliminary numbers show that, in 2019, Minnesota’s GDP grew by 1.4% in real terms compared to a national growth rate of 2.3%. This ranked our state 38th out of the 50 states and District of Columbia and is the fourth year out of the last five that we have lagged the national GDP growth rate.
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’re 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: 2019‘.
John Phelan is an economist at the Center of the American Experiment.