Omaha, Neb. ? Oil prices of more than $50 a barrel and rising prices for other supplies indicate increased inflation at the wholesale level, according to a manufacturing index released Monday.

The overall index of the Mid-America Business Conditions Survey declined slightly in October to 61.6 from September’s brisk 63.9, said Ernie Goss, Creighton University economics professor.

A reading of 50 or above means the manufacturing sector is expanding, while a figure below 50 represents a contraction.

The index that measures prices paid for supplies was above 80 for a ninth straight month, indicating inflation, Goss said.

“With the economy continuing to expand with significant inflationary pressures, I expect the Federal Reserve to continue to raise short-term interest rates,” Goss said.

Vigorous new orders at 63.6 and production at 66.8 were primarily responsible for October’s strong reading, said Goss, who conducts the survey of manufacturing supply managers and leaders in Kansas, Nebraska, Iowa, South Dakota, Minnesota, North Dakota, Arkansas, Oklahoma and Missouri.

On the national level, the manufacturing sector grew in October for the 17th straight month, but at a slower pace than the previous month, the Institute for Supply Management said.

The group’s index for manufacturing activity came in at 56.8, below the level of 58.5 that economists were expecting. The index had been 58.5 in September.

In the Midwest, vigorous hiring has been reported, with the nine-state region adding nearly 131,000 jobs in the last nine months for a 1.1 percent job gain, Goss said.

However, unless oil prices ease below $45 a barrel, the region will have slower job growth for the rest of the year and into 2005, Goss said.