Economist shocked by region’s best monthly showing since last July
OMAHA — Creighton University economist Ernie Goss says he was “shocked” by the progress shown in the latest economic survey for Iowa and eight other Midwestern states.
While he expected another drop, Goss says the region’s overall index, or business barometer, rose to its highest level since July of 2022. That index is measured on a zero-to-100 scale and it bounded from 47 in January to just over 56 in February, a huge jump.
“We asked the supply managers about what they expect in terms of recession,” Goss says. “Thirty-five percent expect no recession, ten percent expect solid growth, and most of the others expect sort of flatlining across the region for the economy, the national economy, that is.”
The regional wholesale inflation gauge rocketed to a six-month high, Goss says, and while hiring numbers were up, the survey found most companies are still hurting for help.
“Still seeing an inability to find and hire those qualified workers, particularly in rural areas of the region,” Goss says. “Difficulty again finding those workers who have the skills necessary for doing the job. Half the firms reported they were having to increase entry level wages to get workers to come in and interview.”
The business barometer for Iowa jumped almost six points during the month, climbing from 47 in January to just over 53 in February. Goss says the Midwest’s numbers were similar and somewhat brightened the projections looking ahead.
“The outlook, at least our numbers now, are pointing toward sideways moving in the overall economy,” Goss says. “In other words, even with the really significant bounce for the month of February, we’re still talking about slow-to-no growth in the regional economy.” Goss says the residential housing market remains mired in recession, in Iowa and across the region.
“We’re probably going to record a sixth straight month of declining housing prices, and we’re seeing that across the board, and we’re also seeing, of course, higher interest rates,” Goss says. “I expect the long-term interest rates, mortgage rates, to rise above seven percent for the first time in many years.”
For Iowa, Goss says machinery manufacturing continues to expand but at a slow pace, while non-durable goods manufacturers, including food processes, expect expanding economic conditions.