Both Nebraska and the Midwest are seeing solid, encouraging economic growth, according to a survey. Creighton University economist Ernie Goss says it’s the seventh consecutive month where Nebraska’s Business Conditions Index rose above growth neutral, meaning, the economy is expanding.
“The leading economic indicator for the next six months was up to its highest level since May of 2006,” Goss says. “That’s very good news and it’s much like the news we’re getting from the national surveys.” Every month, Goss and his team interview supply managers and business leaders from Nebraska and eight other Midwestern states.
“These supply managers are sort of the canaries in the coal mine,” Goss says. “In other words, when they see things positively, see new orders up, sales and employment and other factors up, generally it spills over into the rest of the economy in the months ahead. So it was a good report for the month of March.”
On the downside, Goss says interest rates will soon be rising. “Both long-term and short-term,” Goss says. “Mortgage rates are going to be headed higher, automobile loan interest rates are going to be headed higher. The Fed is going to be raising rates. There are bubbles out there in prices, in certain commodity prices. It hasn’t shown up yet in the CPI, the consumer price index, but it’s going to.”
Based on the survey of supply managers in Nebraska over the past several months, Goss says he expects job gains for the second quarter of 2010. However, he predicts the increase will be very modest with unemployment rates remaining above 4.5% for the rest of the year as workers begin to re-enter the work force.