For the fifth time in 2024, the Creighton University Mid-America Business Conditions Index slumped below growth neutral, hitting 48.1 in September.
Creighton Economist Ernie Goss says the overall index, down just over half a point from August, has vacillated around growth neutral since December of 2023.
Goss says economic optimism among supply managers is waning, with about 62 percent expecting a recession or worsening conditions in the next six months. “The overall economy is not in a recession. However, certain sectors in a recession, and I would argue right now that the manufacturing sector is in a slight recession. The agricultural sector is in a fairly significant recession.”
Goss says while monthly employment figure have been pointing to job growth, it’s all in part-time jobs, and we’re losing full-time positions across all sectors.
He says he anticipates a quarter-point interest rate cut in November from the Federal Reserve, but beyond that will depend on the bond market.
“If we see the ten year yield going up to 3.8 or 3.9%, don’t count on many more Federal Reserve rate cuts. In fact, I don’t think we’ll see a rate increase, but certainly that’ll slow their rate cutting down. And if we should see that any time soon, then a December rate cut by the Federal Reserve is off the table right now,” Goss said.
The regional inventory index, reflecting levels of raw materials and supplies, rose to 51.4 from 45.5 in August. “Due to the potential for an East Coast Longshoremen’s strike in the first week of October, supply managers added to their level of inventories in September,” said Goss.
When asked to identify the top economic challenges over the next six months for their firm, 39.1% of supply managers named higher inflation; 21.7% reported supply chain disruptions and 13.0% listed higher interest rates.
