The director of the University of Iowa’s Institute for Economic Research says while unemployment’s on the rise in Iowa, the job picture is better here than it is elsewhere. The U-of-I’s John Geweke serves on the governor’s council of economic advisors.
"If there is a recession, it’s going to be milder in Iowa than it is in other states and this is because we’re very well-positioned with respect to world-wide markets right now, in particular food and energy," he says. Geweke singles out the state’s agricultural sector as a particular bright spot in the Iowa economy, as worldwide demand for commodities is still strong.
But Geweke says if lending dries up overseas, Iowa farmers could be in trouble. "If the credit situation were to affect the ability of, say, middle class China to adopt a more western, meat-based diet, that would be very important," Geweke says. Geweke’s also watching the value of the dollar. He says the Wall Street bailout that cleared congress last week will keep the dollar low.
"Right now the dollar is very undervalued. That’s good for Iowa because our products look cheap to the rest of the world. Some day that will turn around. I don’t see it happening anytime soon," Geweke says. "The bailout, the additional borrowing — all of that is going to keep the dollar low, so for the next couple of years there are not clouds on the horizon, but if you do want to be watching for clouds, those are the clouds you want to watch for." Geweke was at the statehouse on Friday, meeting with the governor and other economists.