Archive for Friday, October 1, 2010

Midwest economic survey shows improvement; Organizers say little chance of double-dip recession

October 1, 2010


— A September survey of supply managers in nine Midwest and Plains states suggests improving economic conditions, according to a report released Friday.

The Business Conditions Index for the Mid-America Region rose for the first time since May. The increase was slight, to 56.3 from 55.8 in August. It was the 10th straight month the regional index had remained above growth neutral.

Survey organizers said the results likely mean economic conditions will brighten in the months ahead, with little chance of a double-dip recession.

The survey and report use a collection of indexes ranging from zero to 100. Any score above 50 suggests economic growth in the next three to six months, while a score below 50 suggests a contracting economy. States in the survey include:

  • Arkansas
  • Iowa
  • Kansas
  • Minnesota
  • Missouri
  • Nebraska
  • North Dakota
  • Oklahoma
  • South Dakota

Creighton University economics professor Ernie Goss, who oversees the report, said the survey results during the past year "are similar to that expected from exiting a recession."

But, in a note of caution, Goss said U.S. workers are facing a tax increase on Jan. 1 that would hinder economic growth in the U.S. and the region.

Congress has been debating an extension of income-tax cuts for families making less than $250,000 and individuals making less than $200,000. Other tax cuts also are being debated.

The survey's index on economic optimism, which looks ahead six months, dipped to 51.6 in September from 52.4 in August.

Since April, the regional confidence index has slipped, Goss said.

"The level of economic uncertainty clearly influenced the economic outlook of supply managers," he said.

The survey's employment index also slipped in September, to 53.2 from 55.2 in August and 58.8 in July. In September, 22.3 percent of those surveyed reported increases in employment and 16 percent reported decreases.

Since the recession officially ended in June 2009, Goss said, the region has added fewer than 24,000 jobs.

"In terms of jobs, I do not expect the region to be back to pre-recession levels until the first quarter of 2012," he said.

The supply managers were asked an extra question in September: What are your expectations for holiday buying?

The report said 19.5 percent of those who responded expected holiday sales to grow more than 5 percent, while 10.3 percent expected holiday sales to drop more than 5 percent.

Other components of the September overall index:

  • Wholesale prices at 71.1, up from 64.6 in August
  • Inventories rose to 56.3 from 51.9 in August
  • Trade dipped to 50.0 from 51.9 in August
  • New orders at 56.0, up from August's 53.6
  • Production or sales at 57.9, up from 56.5 in August
  • Delivery lead time at 58.4, down from August's 61.7


Moderateguy 7 years, 4 months ago

Hope they are right. I don't think they are though. The government printing money by the truckload (both Bush and Obama by they way) cannot lead to anything but ruin.

The economic indicators to me are basically the equivalent of the old "I can't be out of money, I still have checks left." Optimism can only equal reality in the mind of an economist.

uncleandyt 7 years, 4 months ago

The price of chocolate is going down. Once upon a time, credit cards were issued to tens of millions of people who then maxxed out the card and then had to resort to plan A. Debt was sold to collection companies at bargain prices. It became very popular to invest in less-than-nothing. Accountants were hired to highlight the possibilities of great reward. Assumptions were made that a large percentage of promises are kept. If I can't pay Jim, then Jim can't pay Joe, and on and on and on we go.

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