Omaha, Neb. ? While the economic rebound appears to be in place for the Midwest, inflation is close on its heels, according to a survey of company officials in a nine-state region released Monday.

The economy in the region improved for a fourth straight month, with the survey’s overall growth index for May hitting its highest level since April 2000.

	http://econews.creighton.edu/buscond

The region’s economic index increased to 57.9 in May from 57.5 the month before, a true sign of a rebound in the region’s economy, said Ernie Goss, a Creighton University economics professor who conducts the monthly survey. An index of above 50 signifies economic growth, while a figure below 50 indicates a sluggish economy.

However, any rebound has not yet produced an upturn in the job market, Goss said. The May employment index of 48.3 a drop from April’s 50.2 confirms that employers shed jobs last month. However, Goss said he expects new orders and production increases in May to translate into job gains in the coming months.

There also is a concern of increasing inflation, he said.

Purchasing managers and business leaders surveyed said their companies paid more for materials and products in May than anytime since February 2001, indicating inflation, Goss said.

	Kansas’ economy is beginning to slowly bounce back, according to Creighton University’s monthly survey of the Midwest’s economy. For the first time since the beginning of the national recession, the state’s index rose above 50, reaching 51.9. A score of above 50 represents a growing economy, while a score below signals a shrinking economy. Kansas’ score, although an improvement, still was the second-lowest in the nine-state region.

Higher commodity prices, particularly for steel products, are forcing price increases for supplies and materials bought by firms in the region.

“While I don’t expect the Federal Reserve to raise interest rates at its June meetings in response to heightened inflation pressures, I believe it should and will have to take action by August at the latest,” Goss said.

The business confidence index was down slightly in May, but remained strong at 76.5 compared to April’s 77.4, showing supply managers and business leaders remained optimistic about the region’s economic conditions six to nine months out.

Goss surveys purchasing managers and business leaders in Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.