An economist says high gasoline prices and high interest rates are sharing the blame for foul economic forecasts across the Midwest. Ernie Goss, an economics professor at Creighton University, says his monthly survey bodes ill for the region, but not so much for Iowa.
The June survey of supply managers and business leaders in Iowa and eight other Midwestern states was down for the month, taking its biggest tumble since 1999 in the region, while Iowa’s numbers rose slightly from the previous month. Goss says the numbers indicate continued economic growth for Iowa but a slow-down for the region. He says the coming cuts at Maytag will hurt central Iowa.
Goss says the higher interest rates and higher energy prices are slowing growth, and once those plants in Newton close, that will further slow growth. He predicts economic growth statewide will be slower during the second half of 2006 than we’ve seen during the first half of the year.
Goss says the Federal Reserve Board has been raising interest rates consistently, but he thinks that may be about to change. He says he’s leaning toward the Fed -not- raising rates at the next meeting on August 8th, though he says the previous 17 straight rate hikes are really beginning to slow growth.