A tale of two markets: Rapid City economists leery going into 2019
Rapid City workforce development lays solid foundation for future
RAPID CITY S.D. – Last week, the Department of Labor released their latest jobs report. To the surprise of many, December job growth numbers nearly doubled expectations.
Though the numbers look good, economists say the labor report tells the tale of two economies: The financial market and the labor market. According to Dr. Jared McEntaffer, the director of the Black Hills Knowledge Network, the country’s financial economy and the labor economy don’t grow at the same rate. He said that the labor market, which encompasses jobs, production, industry and agriculture operates behind the financial economy. He says the recent jobs report is an example of the labor market.
In the report, the Labor Department reported the economy gained 312,000 jobs which is a big increase from the expected 176,000. West River is also riding the wave in job growth. Currently, Rapid City is in the thick of a business boom, with a big part due to a business friendly tax climate.
“Our unemployment rate is still staying low, but that tells me that we’re keeping up with the job growth that’s necessary that companies need to grow and expand and come here and become a part of the Rapid City economy,” said Jeff Haverly, the director of Rapid City Economic Development.
The report also says the national unemployment rate rose to 3.9 percent, but that’s not a bad thing. Economists say that the market sees a spike in unemployment during the holiday season because more people are actively looking for jobs. At this time last year, the unemployment rate was 4.1 percent.
So, job numbers look good, but what about the fluctuating stock market?
“In our stock markets, and our financial markets, there’s a massive loss of confidence,” said Dr. McEntaffer. “We’re seeing asset prices falling, we’re seeing equities falling in value, and that’s leading to a lot of skittishness.”
Dr. McEntaffer warns of a potential economic slowdown in the financial market from tariffs and declining commodity prices. He said that the purchasing of commodities for manufacturing and agriculture is starting to slow, such as fewer investments in machinery and capital. If this trend continues he said, it could effect the labor market.
“As we go through an extended period of declining stock markets, when the tariffs are in place longer, all of these things just increase the likelihood that we could be facing a downturn,” Dr. McEntaffer said.
But Rapid City is head of the curve. New ventures like Elevate Rapid City hope to create a skilled workforce and lay the foundation for sustainable job growth.
“We need to make sure our kids have an opportunity to stay here west of the Missouri River or in Rapid City and that those jobs are available,” said Haverly. “That’s where the sustainable jobs come from.”