State Economic Watch

Last Friday, Iowa Governor Kim Reynolds signed legislation amending the state’s existing economic development tax incentive program. The amendment to the  Major Economic Growth Attraction (MEGA) program will “allow a tax incentive up to 10% of qualifying investments for a single eligible business located in a rural county, spread evenly over ten years” rather than the originally enacted 5% incentive for two separate businesses, according to the press release from the Governor’s office. The amendment is targeted at a proposed $15 billion steel plant in Lee County to be constructed by Minnesota-based Mesabi Metals. Opponents of the new incentive program however, question Mesabi’s track record, as a previous iteration of the company had reportedly filed for bankruptcy in 2016.

Farm income is currently much stronger in Oklahoma than in other farm states in the tenth Federal Reserve District, according to an informative report from the Federal Reserve Bank of Kansas City, and high cattle prices are the primary reason. The KC Fed’s economists note that margins in cattle production are much higher than those in crop production and cattle production accounts for about 50% of Oklahoma farm income. As a result, farm income growth in the state is healthier than in the states with a higher exposure to crop production, and agricultural land values are more stable as well. However, the economists caution that high feed and diesel costs along with severe weather, such as drought, could pressure cattle production margins going forward.

Missouri Governor Mike Kehoe signed an executive order this week establishing the Missouri Advanced Nuclear Energy Task Force. According to the press release from the Governor’s office and the Missouri Department of Natural Resources, the Task Force is “charged with evaluating and guiding the state’s strategic approach to nuclear energy development and implementing many of the State Energy Plan’s policy recommendations”. Those recommendations are focused on energy independence, nuclear enablement, economic growth, and reliability. 

According to the recently released UCLA Anderson Forecast , its “September 2026 California outlook is slightly weaker than the June forecast, largely because of continued disruption in energy markets”. The Forecast’s authors project continued economic growth for the state, but “inferior employment performance”. They note that the sectors that have driven state payrolls thus far in 2026, notably health care and social services, education and retail, are not expected to continue to support the state’s labor market going forward as “government budget constraints, reductions in federal support for health care and continued deportations are expected to limit hiring in several of those areas”. The authors expect a California weak labor market in 2026, with recovery in 2027 and 2028. They project nonfarm payroll growth of 0.9% in 2026, 1.2% in 2027, 2.2% in 2028.

According to figures released earlier today by the US Bureau of Economic Analysis , personal income in North Dakota fell at a SAAR of -4.2% in 2Q2026. In fact, North Dakota was the only state to see a decline in personal income in the quarter. The next lowest was South Dakota at a SAAR of +1.3%. At the other end of the spectrum was Wisconsin, with a +6.4% increase in personal income in the quarter. The USBEA’s data indicates that North Dakota suffered from a significant drop in farm income in the quarter, which drove its overall personal income growth figure lower. The dividends, interest and rent and transfer payments components for North Dakota both posted increases in 2Q2026, but the net earnings component dropped 9.3% in the quarter. Of this amount, farm earnings fell 75%. In South Dakota, by comparison, farm earnings only fell 31%. A perfect storm of drought, trade wars and high energy and input prices seems to have resulted in a tidal wave of earnings pressure for North Dakota fa...

According to today’s release of 2Q2026 state GDP from the US Bureau of Economic Analysis, there was a wide disparity in growth rates across the 50 states. Five states posted negative real GDP growth in the quarter, led by West Virginia (-2.3%) and Wyoming (-1.6%). Three other states, North Dakota, Kansas and Nebraska saw modestly negative GDP growth in the quarter. The bulk of West Virginia’s decline was the result of a significant drop in mining/oil & gas extraction. This sector also dragged down Wyoming and North Dakota’s GDP growth, but both states were also negatively impacted by a drop in transportation and warehousing activity. The agriculture sector pushed Kansas and Nebraska’s growth into negative territory. On the other end of the spectrum, New York led the pack at +4.0%, followed by South Carolina and Delaware (+3.5%), Utah and Minnesota (3.4%) and Georgia (+3.1%). New York, Delaware, and Utah benefited from strong gains in the FIRE sectors, while South Carolina and Minn...