The president and C-E-O of the Federal Reserve Bank of Chicago was invited to Iowa this past week to talk about education reform, but Michael Moskow also made some pronouncements on the state of the Iowa economy.
Iowa is part of a Federal Reserve District that includes four other states: Wisconsin, Illinois, Indiana and Michigan. “While other states in this district are heavily dependent on manufacturing, Iowa is more diversified with a relatively larger share of its workers in agriculture and financial services,” Moskow says. “In recent years, Iowa has been one of the strong performers in this region.” He says Iowa’s unemployment rate is below the national average.
The March jobless rate for Iowa — which was just released this week — was three-point-eight percent. And Moskow says Iowa has kept pace in terms of income growth, too. Moskow says the national economy is “doing well” and is poised for continued growth because inflation has been contained. But Moskow worries about a few trouble spots, like the housing market.
In the long-term, Moskow is deeply concerned about the federal budget deficit, the national debt and the rate at which Americans are spending rather than saving. “If you add together all the consumers, all the firms and governments — as a nation we’re spending more than the total income that we earn from production in the U.S. and from the net investment abroad,” Moskow says. “In other words, we’re spending more than we’re earning.” He warns that “eventually” the American public and its politicians will have to makesome “touch decisions” on what to cut. Moskow spoke in Des Moines this past Monday at the Greater Des Moines Partnership luncheon.