OMAHA, Neb. — A survey of business executives suggests economic activity in the Midwest and Plains is still reflecting national troubles, showing weak growth and job losses.
The August Mid-America survey report for the nine-state region says its overall economic index dipped to 51.4, down a tenth of a point from July. June's index was 50.5.
The index ranges between 0 and 100. A score above 50 indicates a growing economy over the next three to six months.
"While the inflation gauge was down for the month, it is still telegraphing excessive inflation in the pipeline," Creighton University economics professor Ernie Goss said in the report issued Tuesday.
The August employment index was 47.5, up from July's 41.4.
Goss, the director of Creighton's Economic Forecasting Group, oversees the survey. It includes supply managers and business leaders in Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
Firms have increased production using fewer workers, said Goss, who expects unemployment rates to continue to rise for the region, with significant variation across the nine states.
Despite the sobering figures, an index measuring economic optimism for the next six months jumped to 50.0 from July's 37.8 and June's 35.1.
A stronger dollar and downturns in commodity prices boosted the index, which was at its highest reading since last September, Goss said.
Recent strengthening of the dollar has cooled inflationary pressures, he said, but it would take oil prices diving below $100 a barrel for the nation to gain any material relief on the inflation front.
Goss said he expects signs of inflation, along with fears of damaging an already weak labor market, will prevent the Federal Reserve from reducing rates when it meets Sept. 16.
Other components of the Business Conditions Index in August were:
- new orders at 48.9, down from July's 52.6;
- production at 53.0, down from 55.7;
- and inventories at 55.2, up from 54.0.
The Creighton Economic Forecasting Group has conducted the monthly survey since 1994.
The Institute for Supply Management, formerly the Purchasing Management Association, began to formally survey its membership in 1931 to gauge business conditions. The Creighton Economic Forecasting Group uses the same methodology as the national survey.