A small contraction in mining activity in early summer dented the otherwise broad growth in Wyomingites’ personal income during the third quarter of the year, according to state economists.
Personal income is the entire income individuals take in, from their wages or salaries to their unemployment or social security benefits. In Wyoming, personal income rose by 3.3 percent in late summer, or $284 million greater than the second quarter, according to federal counts from the Bureau of Economic Analysis.
The growth trend extended across the Rockies, from 5.3 percent growth in the personal income of Coloradoans to 3.1 percent in Montana.
Though economic activity in Wyoming has been spurred over the last few years by an improving outlook in the oil and gas fields, the mining sector’s contribution to personal income was one of the few areas with a loss compared to the second quarter of the year.
Jim Robinson, principal economist for the state’s Economic Analysis Division, said estimates of oil and gas jobs for April, May and June had been revised down in retrospect, likely due to a slight contraction in mining activity at that time. That drop bled into personal income later in the year.
Personal income in the mining sector fell by $42 million. Personal income in the farming sector also fell by $43 million. The biggest contributor to Wyoming’s personal income increase came from the construction industry, with a $45 million bump compared to the second quarter.
Wyoming’s overall population, and workforce, has been declining since the downturn in the state’s key industries of oil, gas and coal. The population fell again this year, but the bleed of people out of the state has retreated. Nearly 8,000 more people left Wyoming than moved in between 2016 and 2017. From the middle of last year to mid-2018 the net loss shrank, with about 3,000 more people leaving than arriving.
“People tend to move to areas where the economy is vibrant, which is particularly true for Wyoming,” said Wenlin Liu, chief economist with the Economic Analysis Division, in a statement from mid-December when the population numbers were released. Liu noted that the oil and gas industry had improved efficiency during the economic downturn, which had likely subdued the demand for returning workers as things improved.
The positive growth in neighboring states like Colorado had also likely tempted workers to jobs across the border. Wyoming was the only state in the Rockies with population loss over the last year, according to the U.S. Census Bureau.
“In addition, payroll jobs in state and local government, and the retail trade industry in 2018 were still lower than the previous year,” Liu said of Wyoming. “The state’s overall labor market featured moderate job growth and continued decline in the labor force.”
Wyoming’s economic health is directly tied to its mineral industries, which contributed about 52 percent of its direct revenue in 2017. When fossil fuel industries are booming, that direct revenue percentage swells.
The current improvements in wages, jobs, revenue and falling unemployment are all tied to improvements in the price of crude beginning in 2017.
The steady price of oil held until about October of this year. The price has fallen by 40 percent since then, steadying around $50 in a Christmas turnaround due to fears that the market was overreacting and the news of a meeting with members of the OPEC cartel to address the decline.
Continued depression of the price could slow the investment excitement that’s spurred development and planned development in Wyoming’s oil and gas sector, while too much timidity from the sector due to uncertain prices could cause a spike in price later on.