Economic index shows Midwest economy is slowing, prices are rising
If you've been out of town for a little while, then you this might be news: this rain we've been getting is a rare, rare, thing. Yes, the drought has been on our minds--and our radio--all summer long and a little rain this week doesn't change the fact that it's been devastating to farmers and the economy.
We spoke to Dr Ernie Goss. He heads up the economic forecasting group in at Creighton University in Omaha, Nebraska. Each month he surveys the supply managers who purchase the raw materials and services companies need to function. What these suppliers do is key to economic activity and growth in the Midwest region.
A shorter version of this interview ran on Business Beat, a weekly program about business and economics in the Midwest region.
Dr. Ernie Goss on this month's business index:
What we had for the month of August was a number for the region slightly below growth neutral. What that's telling us is that we're going to see slow to no growth for the next six months. That's going to play out in terms of very little job growth. The unemployment rate's going to remain about the same well into the end of 2012.
Dr. Ernie Goss on inflation:
We ask about prices. And it's still rising uncomfortably. Food prices are growing. Other prices are growing. So what does that mean? That means that consumers are going to see higher prices, growing as much as 4% to 6% annualized. Then you're talking about other prices growing a little too fast for the federal reserve. I just don't see how they could be too aggressive in terms of the money supply with these inflationary pressures out there.
Dr. Ernie Goss on the drought:
I hear a lot of folks, particularly in the political class say hey, we're just crawling out of this recession. Well, hey, we crawled out of it last fall to the tune of over 4% and now we're under 2%. So if we're crawling out of the hole, now we're crawling back into that economic hole. We're seeing impacts from some new factors. Drought is one of them.