Minneapolis Fed says regional economy improving
The Federal Reserve Bank of Minneapolis says the region's economy seems to be improving modestly.
The bank's midyear economic update was released Wednesday and forecasts a 1.8 percent employment increase in Minnesota this year and a 1.4 percent rise next year.
But Rob Grunewald, an economist with the Fed, said it will likely be several years before Minnesota recovers all the jobs it lost in the recession.
"At that pace of growth and what out forecast models show going forward, it will still take beyond potentially 2013 to achieve the employment levels seen prior to the recession," he said.
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The bank is forecasting an unemployment rate of 6.8 percent for Minnesota by the end of the year down from the most recent reading of 7.2 percent in April.
With more people working, consumers should have more money in their pockets. The Fed forecasts a 3.6 percent increase in personal income for Minnesotans this year. That includes wages, and other income.
FARMERS ENJOY A GOOD YEAR
Toby Madden, an economist with the Fed, says farmers are enjoying good weather and favorable pricing trends.
"Livestock prices are expected to increase and milk prices are expected to increase, which should help out those sectors," Madden said. "Crops got into the ground early this year. And we've had a pretty decent spring in terms of the calving season."
As recently as April, a Fed survey of agricultural lenders found half of them expected farm profits would fall this year, but now just 42 percent expect a decline in farm profits. Fourteen percent are expecting farm profits will rise.