(Omaha, Neb.)– The Mid-America Business Conditions Index for July in the nine-state region that includes Iowa and Minnesota, had some sobering news. The index is compiled by Creighton University Economist Ernie Goss. He says the numbers for July took a steep dive from June…
“In fact rivaling the lows we’ve seen in the U.S. number indicating a significant slow down in the manufacturing sector in the nine midwest America states, down to 46.1. Of course that’s down from 50.8 last month, that would be June, which of course is below growth neutral. Growth neutral is 50. Of course last month’s June 50.8 was above growth neutral. So this is not a good number and it’s contrary to a lot of numbers we’re seeing coming out, but it’s very consistent with what we’re seeing coming out for the national supply manager’s survey in terms of manufacturing.”
Goss says hiring was also down, with that index dropping to 45.6 from 50 in June…
“Now some of that is just due to the inability to find and hire qualified workers. In other words, the unemployment rates in almost all of the states are running very low. But also we’re now seeing for the first time in quite some time layoffs there, so that’s the reason the number came down.”
Goss adds that nearly 46 percent of supply managers they surveyed in the nine state region still feel a recession is in the works in coming months…
“On average we had a 45.9 percent probability of a recession in the second half of 2023 and that’s well above current expectations. So I think the optimism we’re seeing in national surveys right now is a bit overdone. The economy is just not going to expand at the current expectations of investors and politicians and political leaders out there right now.”
Goss expects the Federal Reserve will keep interest rates at the current level when they meet in September.
