Oil & Earnings in Grand Forks
So employment data in North Dakota occupied most of my thoughts over the last week or so. I thought it time to take a quick look at earnings data from the Bureau of Economic Analysis. Quite often I hear people mention the concept of diversification with a local economy as if it represents a buffer against downturns. I am still thinking about; I am not sure I buy it either in part or in whole. That will need to wait for another day.
I looked at private non-farm earnings in the Grand Forks MSA and I see no signs that oil growth increased earnings. (Graphs will follow later after I ponder this some more). In fact the only argument I can see that oil contributed to earnings growth in Grand Forks would be to claim earnings were in decline. There really are not significant changes in the shares of overall private non-farm earnings either.
This speaks to either the irrelevance of oil, which I find hard to believe, or the notion that oil activity substituted for other activity so there was little true gain had as a result. This argument might match well with the employment data I discussed last week, but there is clearly more analysis to perform before I can make that claim.