The latest check of Iowa’s business climate finds a significant slowdown during October which bodes ill for the upcoming holiday shopping season and for job prospects after the start of the new year. Ernie Goss, a Creighton University economics professor, says Iowa’s numbers are continuing to fall.
Goss says the survey of Iowa purchasing managers shows the Iowa economy is slowing down. The state’s list of leading economic indicators declined for the third consecutive month pointing to slower growth in the months ahead, kicking in early in 2008 with slower job growth. He says farm income in Iowa is very good right now and it’s that agricultural sector that’s holding up the state’s economy, at least to some extent.
Goss says the state’s immediate economic future doesn’t look so bright. He says the holiday buying season will be "lackluster" for merchants as the growth rate is projected to be up only slightly above the rate of inflation. He says that figure should be more than double inflation for a successful season.
Goss says several financial factors are weighing on Iowans and he’s predicting they’ll be forced to cut back on their buying and traveling in the coming few months. He says consumers are being hit with higher food prices while oil prices are bouncing up near $100 a barrel and that will shoot gasoline prices up as the holiday travel season begins. There’s also the housing downturn.
Goss says, "You put all that together and it’s just not a good time for the consumer and the consumer’s going to cut back on the family spending at this time of the year." He says Iowa’s unemployment rate has increased by half a percentage point since January. Based on the Creighton survey, Goss says he expects Iowa’s jobless rate to end the year at its current level of three-point-nine percent.