Supply managers say the economy is contracting as they remain pessimistic about the economic outlook, according to Creighton University’s August Mid-America Business Conditions Index.
The index fell to contractionary mode for the fourth time this year, dropping two points to 48.7. The index for economic optimism fell to 26.7 from 30.6 in July. More than one in three cited a recession as the greatest threat, while 23.5 percent cited higher prices as the most pressing issue.
The index for employment fell to 45.2 from 49.7 in July. Hiring in the Mid-America region was up 1.5 percent, while manufacturing employment was down less than half a percent. Manufacturing jobs were shed in Minnesota, South Dakota, Missouri and Iowa. States that gained manufacturing employment included Nebraska, North Dakota, Oklahoma and Kansas.
The index for wholesale prices fell for the sixth straight month, to 56.2 from 59.9 in July, as inflation fell to a nearly 2 1/2 year low of 2.9 percent. Goss predicted the Federal Open Market Committee will enact a 0.25 percent rate cut later this month.
Other report findings included:
- The regional inventory index, which reflects levels of raw supplies and materials, fell to 45.5 from 50.8 in July. Goss said supply managers cut back on supplies of raw materials because of falling sales expectations.
- The export index fell to 50 from 51.5 in July as the strong dollar continued to make U.S. goods less competitively priced abroad. Weakening regional economic conditions caused the import reading to fall to 45.1 from 47.6 in July.
