Kansas is in line for its most robust job growth in seven years, a Creighton University economist said Monday.
But the positive job numbers - along with the underlying strength in the manufacturing sector and suppliers that feed its production - offer both good and bad news for Kansas consumers, said Ernie Goss, a regional economist and director of the Creighton Economic Forecasting Group.
"The No. 1 thing is that your job prospects, if you're unemployed, are going be somewhat better in the months ahead," said Goss, whose group released results Monday of its Business Conditions Index. "But you'll face higher interest rates in the months ahead - anything on short term. That would be on an automobile loan; that would be on a credit card balance; that would be on a prime interest rate for businesses. All of those are going to be trending upward."
The jobs numbers are part of the group's overall index, an economic barometer for the Midwest. The results are compiled from information gleaned from monthly surveys of supply managers in nine states.
Goss said Monday that the overall index for the Midwest climbed to 59.7 in July, up from 59.2 a month earlier. The index runs on a scale of zero to 100, with anything above 50 translating to an expanding economy for the next three to six months; anything below 50 indicates economic contraction.
The group's numbers for Kansas and the Midwest outpaced results from a comparable nationwide survey compiled by the private Institute for Supply Management. That survey, using the same methodology as Goss, showed a nationwide index of 56.6 in July, up from 53.8 in June and beyond the 54.1 that analysts had been expecting.
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Job growth forecasted for this year (December 2004 to December 2005) in Kansas, compared with years past, according to Ernie Goss, a Creighton University economist:
¢ 2005 - Gain 23,000 jobs, up 1.7 percent.
¢ 2004 - Gain 21,000, up 1.6 percent.
¢ 2003 - Lose 26,000, down 1.9 percent.
¢ 2002 - Lose 3,000, down 0.2 percent.
¢ 2001 - Lose 7,000, down 0.6 percent.
¢ 2000 - Gain 10,300, up 0.8 percent.
¢ 1999 - Gain 13,500, up 1 percent.
¢ 1998 - Gain 38,000, up 2.9 percent.
While the nationwide totals were helped by surging auto sales, Kansas' index also climbed on transportation-related production and supplies - largely focused on the resurgent aviation sector, Goss said.
Kansas' index was 57.7 for July, down from 61.5 in June but still "very solid," Goss said.
"You've got a lot of momentum," Goss said. "Both in Kansas and in the national numbers, we're seeing some good growth. Kansas is down for the month, but it is still in a good growth range. They're both telling us the same thing: They're both telling us the economy is very likely to be growing in the months ahead, and the Fed will be raising rates."
Goss said he was "99.9 percent sure" - that Fed Reserve chairman Alan Greenspan and the Fed's board of governors would move to boost the nation's key interest rate by 0.25 percent Aug. 9.
An identical increase, he said, also is likely in September.
"Greenspan and the Fed, they're going to take the punchbowl away from the party by raising rates," said Goss, who believes the Fed is being overly aggressive in its rate increases. "It will slow things down, but it's just a question of how much."
On the jobs front, Goss said, Kansas has been building strength from the new jobs, plus longer work hours for employees of makers of transportation-related equipment. Such positives have offset weaker conditions at beef-processing and telecommunications operations.
Kansas' employment index for July was 67.9. That ranked the state third, with North Dakota, in the nine-state region regarding strength in employment.
In the overall index - which includes employment, production, new orders, delivery speeds and inventories - Kansas ranked six among nine states for July. The overall rankings: South Dakota, 74.4; Nebraska, 67.7; North Dakota, 61.5; Iowa, 60.1; Arkansas, 57.9; Kansas, 57.7; Minnesota, 56.6; Oklahoma, 54.2; and Missouri, 51.1.
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