State Economic Watch

  A presentation deck released today by the Federal Reserve Bank of New York’s Director of Research contains the below exhibit on New York State employment growth. The exhibit illustrates the three month average y/y employment growth  for the state by sector, and provides graphic evidence of what most people intuitively believe - it’s been all about healthcare. Apart from some modest gains in government, financial services and business services, the majority of the y/y payroll growth in New York State over the past year has come from healthcare. As the exhibit illustrates, leisure and hospitality has been the worst performing employment sector over this period. The below exhibit is reproduced from the New York Fed’s presentation deck.

A new study by the American Farm Bureau Federation finds that farm income in the United States is highly concentrated among a few states. Using USDA data, the study found that four states, California, Texas, Iowa and Nebraska accounted for more than 30% of the total US net farm income in 2025. The state rankings were similar for gross farm revenue and farm production expenses. Finally, the study concluded that ten states “accounted for more than 50% of the nation’s real gross farm income” in 2025. The below exhibit is reproduced from the American Farm Bureau Federation’s press release.

The Creighton University Mid-America Business Conditions Index moved slightly lower m/m in September, but remained above neutral for the eighth consecutive month according to a press release from the University. The Business Conditions Index fell to 55.7 in September from 57.1 in August. Similarly, the employment index fell 2.6 points m/m to 51.8. Many respondents reported that tariffs and the Iran conflict are pressuring their businesses. The individual state business conditions indexes that make up the survey, Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma, and South Dakota, all posted m/m dips but remained at a 50+ expansion level.

A new study from NAFSA: Association of International Educators finds that the drop in international student enrollment in the Fall 2025 semester produced a total economic loss of $1.1 billion for the US. The study estimates the state-by-state share of this assumed aggregate loss. Not surprisingly, California is estimated to have suffered the largest economic loss at $161.9 million, followed by New York at $152.5 million.

Last Friday, Iowa Governor Kim Reynolds signed legislation amending the state’s existing economic development tax incentive program. The amendment to the  Major Economic Growth Attraction (MEGA) program will “allow a tax incentive up to 10% of qualifying investments for a single eligible business located in a rural county, spread evenly over ten years” rather than the originally enacted 5% incentive for two separate businesses, according to the press release from the Governor’s office. The amendment is targeted at a proposed $15 billion steel plant in Lee County to be constructed by Minnesota-based Mesabi Metals. Opponents of the new incentive program however, question Mesabi’s track record, as a previous iteration of the company had reportedly filed for bankruptcy in 2016.

Farm income is currently much stronger in Oklahoma than in other farm states in the tenth Federal Reserve District, according to an informative report from the Federal Reserve Bank of Kansas City, and high cattle prices are the primary reason. The KC Fed’s economists note that margins in cattle production are much higher than those in crop production and cattle production accounts for about 50% of Oklahoma farm income. As a result, farm income growth in the state is healthier than in the states with a higher exposure to crop production, and agricultural land values are more stable as well. However, the economists caution that high feed and diesel costs along with severe weather, such as drought, could pressure cattle production margins going forward.