The economy is a lot warmer than the weather. That from Creighton University Economist Ernie Goss who says 2017 ended on a strong note. He says the overall Mid-America Business Conditions Index climbed to 59.0 in December from 57.2 in November.
Goss says, “The urban areas, the Omaha’s, the Minneapolis, other cities like St. Louis and Kansas City are doing quit well. I’ll call it a very healthy regional economy. There are some pockets of problems like in agriculture.” Goss says the region is tracking with the national economy even though the rural areas are not up to where we would like to see them.
The Business Confidence Index soared to its highest level in almost seven years. December’s employment index remained above growth neutral with a reading of 57.7, up from 53.6 in November. Goss says we are facing some labor shortages in this part of the country but that isn’t unusual. For a third straight month the regional wholesale inflation gauge cooled to a still strong 72.3 in December from November’s 71.4.
Goss says confidence looking ahead for the next six months is very strong. December came in at 72.2 from November’s 71.9. December inventories indicate that businesses expanded supplies of raw materials and supplies but at a slower pace than in November.
The December Business Conditions Index for Nebraska rose to 57.6 from 54.8 in November.
Goss says there are several things to watch for as we head into 2018. Goss says, “Inflation, inflation, inflation. That is just something we need to keep an eye on. NAFTA, again keep an eye on NAFTA. I think what happens there is going to be a very big factor. Finally, the number one thing, a risk factor and to keep an eye on is the yield on the 10 year treasury. It is about 2.4, 2.5 percent. When that moves up, if it should move up to 3 percent and hold there, that is a risk factor and something that we need to watch.”
Goss says the Mid-America Business Conditions Index remained above the 50.0 growth neutral mark for 13 straight months and that continues to point to positive growth for the region over the next three to six months.