The latest report on the economies in Iowa and the Midwest region as a whole shows only a slight improvement for February. Creighton University economist Ernie Goss says the survey of supply managers and business leaders displays a modest uptick, but the report is still quite dismal, given how poorly January’s report turned out.
Goss says, "The leading economic indicator was up a bit but still in the danger territory, still well below growth neutral, almost at record low levels and that would be up from January but still not a good signal for the nine-state region going forward." While the massive federal economic stimulus package has passed through Congress, Goss isn’t convinced it’ll bring all of the hoped-for effects.
"We will see some impacts from the president’s stimulus package, perhaps as early as the second quarter of this year," Goss says. "The more important impact will come from the Federal Reserve. Now, with interest rates at their lowest since the Federal Reserve was formed in 1913. You put all that together, we are going to see an economic turnaround."
Still, Goss fears the actions being taken now will lead to "excessive inflation" by 2010 and he says our current leaders appear to have "no regard and no concern" for that inflation. For the Midwest region, the survey showed job losses for the 13th time in the past 14 months. For the ninth straight month, Goss says Iowa’s Business Conditions Index was below growth neutral, meaning, it’s shrinking.
"At least the reports were not as bad for Iowa as some of the other states," Goss says,"for example, your northern neighbor, Minnesota is having a much tougher go of it, economically speaking. Likewise, Missouri, not doing as well. While I am expecting job losses to continue for Iowa, I think the pace of those job losses may slow down a bit."
He says while the agriculture machinery manufacturing industry has held up better than many other industries in Iowa, "I expect it to be the turnaround industry for the state and will provide an early signal of an expanding global market place."