Iowa posted its worst-ever numbers in the new Creighton University survey of supply managers and business leaders, conducted during January. Creighton economist Ernie Goss says Iowa’s economy is mirroring those of the other eight Midwestern states as they suffer during this recession.
"The leading economic indicator from that survey was down to a record low so what it’s pointing to for Iowa is a deepening economic downturn and certainly that’s much like what we’re seeing in the other states that we survey each month," Goss says. Reports are coming out almost daily about Iowa manufacturers that are laying off dozens or hundreds of workers, while others are closing their doors.
Goss says there will be more of that negative news, perhaps for months, before things start to get brighter. He predicts Iowa’s jobless rate may rise another percentage point by the end of the second quarter, but he does expect a turnaround by the final quarter of the year as the record low interest rates prod businesses into investing again.
Goss has not favored the recent federal efforts to stimulate the economy, saying they’ve been a colossal waste of money, and he has little faith the latest plan by the new administration will have a different impact. "What we need now is a real immediate bump to the economy and I would advise more tax cuts, more stimulating the consumer in terms of tax cuts, more stimulative in terms of businesses, investment tax credits, more support for the housing market," Goss says. "Those (moves) would go a long way toward moving us out of a recession."
He says the latest stimulus plan from the federal government may contain some good elements but they’re all too long-term. Goss says the nation can’t wait two or three years for them to take hold.