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A sunny forecast for Minnesota's economy in 2015

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An optimistic forecast for Minnesota came out Tuesday. It's not predicting a big warmup in temperatures, but rather a sunny economy for 2015.

The annual outlook comes from the Federal Reserve Bank of Minneapolis, which predicts unemployment will fall even further and personal income will grow.

“Expect another good year in Minnesota, with more employment, fewer unemployed people, increases in personal income,” said Toby Madden, an economist at the Minneapolis Fed.

The operative term is "moderate," according to Madden. He noted that Minnesota's economy grew moderately in 2014 and will continue to grow at about the same rate this year.

The Fed expects the state's unemployment rate to fall from 3.7 percent in November 2014 to 3.3 percent in the fourth quarter of 2015. It also predicts personal income will increase by 4.6 percent.

Lower gas prices have also put more money into consumers' pockets – about $70 per month for the typical family, according to the survey.

“For consumers, lower gas prices have freed up funds to spend elsewhere,” said Rob Grunewald, also an economist at the Minneapolis Fed, according to the Star Tribune. “However lower oil prices are not good news for companies involved with oil production and drilling.”

The Fed also does a survey each year of businesses in the region, and a full 90 percent of the 315 who responded are optimistic about the state's economic growth in the coming year.

As for their own performance, many of those businesses expect more sales and higher profits, and also expect to hire more people.

"Minnesota manufacturers have been on a roll for the past five years," said Madden.

But there are a few clouds in the forecast as well, the St. Paul Pioneer Press notes.

The agriculture sector is dragging in part because of lower crop prices, although that's actually a good thing for livestock producers. And home building is still sluggish and will likely stay that way for the year.

Another concern for many workers is that their wages haven't gone up very much, said Madden. Most of the employers who were surveyed said they plan to raise their employees' wages by 2-3 percent. Only a few said they would provide larger increases.

The region covered by the Minneapolis Fed includes Minnesota, North and South Dakota, Montana, northern Wisconsin and Michigan's Upper Peninsula.

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