The latest report on the economies in Nebraska and the Midwest region as a whole are showing a very slight improvement for February. Creighton University economist Ernie Goss says the survey of supply managers and business leaders showed a modest uptick, but the report is still dismal, given how poor January 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 is 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 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 sixth consecutive month, Goss says Nebraska’s leading economic indicator was below growth neutral, meaning, it’s shrinking.
“While the strong farm economy in 2007 and ’08 really underpinned the Nebraska economy, and for that matter the regional economy, we’re not going to see that support from the farm sector for 2009,” Goss says. “I expect negative growth for Nebraska, well into the fourth quarter of 2009.”
He says while Nebraska’s computer and electronic-product manufacturing is relatively small, it has lost approximately 500 jobs since the beginning of the recession. Goss says, “I expect this industry to be Nebraska’s turnaround industry and will provide an early signal of an economic expansion.”