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Archive for Friday, March 2, 2001

Economy slips in Midwest

Unemployment, inflation up, survey says

March 2, 2001

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— The Midwest economy slipped again in February and is at its lowest point since the nine-state regional surveys began in September 1994, a polling of purchasing managers indicated Thursday.

Based on a survey of purchasing executives who buy the raw materials for manufacturing companies in the Midwest region, the overall index was 45.8, down from January's reading of 47.3, said Creighton University economics professor Ernie Goss.

This was the fourth consecutive month that the overall reading dropped below 50. A reading of 50 or higher indicates a growing economy.

The region includes Arkansas, Kansas, Missouri, Oklahoma, South Dakota, North Dakota, Nebraska, Iowa and Minnesota.

February's prices-paid index for the nine-state region rose for the second consecutive month to 66.0 from January's already high 64.3.

That was the highest reading for the inflation index since July 2000 and is the result of rapidly rising energy costs during the past several months, Goss said.

"I remain concerned about the increasing likelihood of stagflation, or rising inflationary pressures combined with negative growth or recession," he said.

He also was concerned about the drop in the February employment of new jobs index to 42.7 from January's weak 45.8 rating.

Other components of the overall index confirm the economic weakness as February production stood at 46.1 compared with January's 37.5. New orders declined to 44.4 from January's 46.3 and export orders remained weak and unchanged at 44.6.

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