Creighton University economist Ernie Goss says the midwest economy has slowed in his latest business survey — but he says overall the region is still doing better than the rest of the country. Goss surveys supply managers in nine states, including Iowa, to get his business index.
Goss says the index, which is a leading economic indicator from the survey, was below growth neutral and is "fairly negative." He says there’s still "unacceptably high inflation" which points to negative state growth. Goss the June flooding is still impacting the state.
Goss says his survey hasn’t show a rebound from the floods earlier in the summer. Goss says Iowa and the other states are taking as big a hit as the east and west coasts from the current financial crisis. Goss says housing prices in Iowa and other states in the region did not boom as much as the coasts and so there’s not the pullback seen in other parts of the country. He says banks in the region were also more conservative and did not lend as much to people to buy homes they couldn’t afford.
Goss says the looking ahead six months, economic optimism, captured by the confidence index, nose dived from 50 in August to 38.4. Goss says if you compare his survey to the national numbers, the consumer confidence is not nearly as negative as the national numbers that were released today. Goss says he expects the lower consumer confidence to translate into lower growth in the fourth quarter. With all the negatives out there, Goss still offers this advice.
"This is no time to panic, the numbers that we’re tracking and even the national numbers, while they are negative, this is not panic time, this is not the 1930’s Depression," Goss says. Goss says now is not the time to sell off stocks that have dropped. He says the adage is "buy low and sell high," so people shouldn’t sell out on everything and be patient for a return of the market.