After President Donald Trump highlighted the strength of the national economy in his State of the Union speech on Tuesday, Alaska Gov. Mike Dunleavy posted on social media, “Under President Trump, the American and Alaskan economies have never been stronger.”
National fact-checkers have challenged some of the president’s assertions about the U.S. economy.
But what about Dunleavy’s claim? Is Alaska’s economy the strongest it has ever been?
Asked what figures the administration was basing its statement on, Dunleavy deputy communications director Jeff Turner pointed to previous statements about record low unemployment, job growth and higher wages.
Economists have said the state is enjoying a modest recovery from a recession that ended in 2019.
But Alaska has seen faster employment growth in previous eras when the state’s North Slope fields produced more oil. It’s also had more overall economic output in the past, thanks again to oil.
Unemployment in Alaska is at its lowest rate on record, though there’s a caveat for that.
Gross domestic product:
The governor has frequently cited increases in the state’s gross domestic product — a measure of all goods and services produced in Alaska — as signs of economic growth.
The state’s GDP has grown every quarter that Dunleavy has been in office, according to the federal Bureau of Economic Analysis, continuing a trend that started in the first quarter of 2018, before he was elected.
According to Jeannine Aversa, chief of public affairs and outreach for the BEA, fluctuations in the price of oil and minerals are the biggest driver of Alaska’s GDP figures.
The state’s GDP has been stronger in the past. Adjusted for inflation, the state’s GDP peaked at $58.59 billion in the second quarter of 2012, just after North Slope crude reached $123.83 per barrel, or $138 if adjusted for inflation today.
Unemployment and jobs:
At a seasonally adjusted 6.1%, Alaska’s unemployment rate is the lowest since record-keeping began in 1976. The number of unemployment insurance claims has also fallen steadily since 2011.
That’s good news, but at least part of the decline in unemployment is because there are fewer workers in Alaska. This July, 358,400 workers were employed in Alaska. That’s down from 365,000 in July 2015, the all-time peak, according to federal and state figures.
Alaska’s population has fallen for three consecutive years, in part because of a significant decline in the number of people moving to the state and a drop in the number of new births.
The number of people moving out of the state has exceeded the number of people moving into Alaska for seven consecutive years.
What people are paid:
Total wages paid by Alaska employers have grown since the latter part of 2017, according to the latest state figures.
In 2018, they reached $18 billion.
The strongest year on record came in 2015, when total wages were $18.3 billion. But plunging oil prices began to take hold that year, and the oil and gas industry, the state’s most valuable sector, began laying off workers.
Thousands ultimately lost their jobs. Hiring in the oil patch began to slowly recover in 2018. The high-paying industry, plus growth in construction jobs, has played a role in the rise in total wages.
Time will tell if 2019 sets a new mark. Only the first three quarters of data for that year are available so far, but growth is healthy, up 4.4% from the same period in 2018, according to data provided by state economist Neal Fried.
The indicator reached $14.1 billion for that period in 2019, up from $13.5 billion during the same period in 2018, Fried said.