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South Dakota Economy Shone for Six Months But Stagnated in 2019 and 2021

Prodigal advisor Corey Lewandowski appears to have broken Kristi Noem of her bad habit of claiming South Dakota has the “strongest economy in the nation“, not because that claim is false, but because it doesn’t rouse the cowgirl-poster base as turgidly as idolizing fetusesbullying transgender people, or ignoring Juneteenth.

But if Kristi turns back to economic pontifications, she could look at Fed data and correctly say that South Dakota had the strongest economy in the region…relative to its own 2019 baseline… for six months during the pandemic. The Federal Reserve Bank of Minneapolis posts some economic indicators for the Ninth District, and one chart shows that in Quarter 4 of 2020 and Quarter 1 of 2021, South Dakota’s real GDP compared to its 2021 Q1 level was higher than the comparably indexed real GDP in Minnesota, Montana, North Dakota, and Wisconsin:

Federal Reserve Bank of Minneapolis, Quarterly Real GDP in Ninth District 2019–2021, indexed to each state's 2019 Q1 level, retrieved 2022.06.24.
Federal Reserve Bank of Minneapolis, Quarterly Real GDP in Ninth District 2019–2021, indexed to each state’s 2019 Q1 level, retrieved 2022.06.24.

Note that this chart isn’t saying that South Dakota (the green line) had more real GDP or GDP growth than anyone else; it just says that, from October 2020 through March 2021, South Dakota’s real GDP had grown more compared to where it was in January–March 2019 than real GDP had grown in these four other states and in the U.S. over that same period. South Dakota actually had a more humdrum 2019 than everyone else on this chart, with its economy shrinking in 2019 Q2. We recovered notably in 2020 Q1, lost less than other states did when the pandemic sank into the economy in 2020 Q2, bounced back like everyone else in 2020 Q3, and then outpaced other states in growth, relatively speaking, for two quarters.

But then in 2021 Q2, Montana surged past us for real GDP relatively to its 2019 Q1 baseline while South Dakota’s real GDP stagnated. Our real GDP rose to 104.8% of the 2019 baseline in Q1, creaked up to 105.1 in Q2, recessed to 104.8 in Q3 (when we should have been making trailer-loads of money during Sturgis season), and struggled to 104.9 in Q4. At the end of 2021, the US economic growth as a whole surpassed South Dakota’s, reaching 105.2% of its 2019 baseline.

Outside of the 2020 Q2 pandemic dip that hammered everybody, South Dakota’s real GDP growth has been mostly stagnant. It appears that wind farm construction and federal coronavirus handouts helped ratchet our economy up through the pandemic in 2020, but our real GDP mostly quavered in place in 2019 and 2021. Meanwhile, nationwide and notably in Minnesota, the lines sloped steadily upward through 2019 and 2021.

But hey, that was all too complicated for a Kristi blurb before we even got to the chart.


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