Farm income is down as commodity prices fall, hampering an otherwise stable state economy.
Agriculture is struggling now, after some very good years. It’s not the only sector having difficulty as we close out 2016.
Creighton University economist Ernie Goss says agriculture, manufacturing, and energy are losing jobs.
“As a broader economy, when you put it all together though, it’s a slight positive economy for Nebraska, but only very slight,” Goss tells Nebraska Radio Network affiliate KFAB. “For those areas dependent on those three sectors – agriculture, energy, and manufacturing – it’s definitely in the negative area.”
Goss says the Federal Reserve is poised to raise interest rates, which have been hovering at historic lows.
“Right now I’m looking at the CPI, the Consumer Price Index, which will come out November the 17th,” Goss says. “If that comes in strong, we’ll have a rate hike by the Federal Reserve in December and we’ll probably have another one in the first quarter of 2017.”
Financial trouble in the farm sector has had a very real impact on state government. The state economic forecasting board has lowered its expectation for tax collections for the next two-year state budget, now projecting a $910 million shortfall for the biennium.
Tax collections had been forecast to total $4.567 billion for the current fiscal year. That has been revised downward to $4.395 billion. Eight months remain in the fiscal year. The Unicameral will consider the next two-year budget during the upcoming legislative session which begins in January.
The Nebraska Economic Forecasting Advisory Board meets next on February 27th.
AUDIO: Brent Martin reports [:50]