For the seventh straight month, the Creighton University Rural Mainstreet Index remained in solid growth territory in June.
According to the monthly survey of bank CEOs in rural areas of a 10-state region including Nebraska and surrounding states, the overall index this month was a still strong reading of 70.0, down nearly nine points from May’s record high.
Approximately, 46.7% of bank CEOs reported their local economy expanded the last 30 days, but they see trouble on the horizon.
Only 30 percent believe current inflation rates are temporary, and more than 75 percent believe the Federal Reserve should start raising interest rates before the end of the year.
Nebraska’s reading dropped nearly 14 points to a reading just over 74, while Wyoming’s index was 65.5, down nearly 13 points from last month.
Details from the report issued Thursday:
Farming and ranching: For a ninth straight month, the farmland price index advanced significantly above growth neutral. The June reading slipped to a very strong 75.9 from May’s 78.1. This is first time since 2013 that Creighton’s survey has recorded nine straight months of farmland prices above growth neutral.
The June farm equipment-sales index rose to 71.6 from 67.9, its highest level since 2012, and up from May’s 67.9. After 86 straight months of readings below growth neutral, farm equipment sales bounced into growth territory for the last seven months. This is the best growth in this index since 2012.
Banking: The June loan volume index declined to 54.9 from May’s 59.0. The checking-deposit index fell to a very solid 70.0 from May’s 87.9, while the index for certificates of deposit, and other savings instruments, slumped to 35.0 from 43.9 in May.
More than half, or 53.3% of the bank CEOs judge the current uptick in the consumer price index (CPI) a. Only 30% expect the increase to be transitory.
More than three-fourths of the bankers think the Federal Reserve should begin raising interest rates before the end of 2021.
Hiring: The new hiring index slipped to 71.7 from 72.7 in May. Despite recent solid job gains for the region, data from the U.S. Bureau of Labor Statistics indicate that nonfarm employment levels for the Rural Mainstreet economy are down by almost 89,000 (nonseasonally adjusted), or 2%, compared to pre-COVID-19 levels.
Confidence: The confidence index, which reflects bank CEO expectations for the economy six months out, decreased to 71.7 from May’s 78.8. “Federal stimulus checks, strong grain prices, and advancing exports have supported a healthy confidence number,” said Goss.
Home and retail sales: The home-sales index declined to 78.3 from May’s record high 83.3. The retail-sales index for June dipped to a robust 70.0 from 71.2 in May. “The federal stimulus checks are having a very positive impact on Rural Mainstreet retail sales,” said Goss.
Each month, community bank presidents and CEOs in nonurban agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities, and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included.
This survey represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index (RMI) is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey in 2005 and launched in January 2006.
Below are the state reports:
Colorado: Colorado’s Rural Mainstreet Index (RMI) for June fell to 71.6 from May’s 77.9. The farmland and ranchland-price index decreased to 76.7 from 77.6 in May. Colorado’s hiring index for June climbed to 72.5 from 69.1 in May. Despite recent job gains, U.S. Bureau of Labor Statistics data indicate that Colorado’s Rural Mainstreet nonfarm employment remains more than 22,500 jobs, or 6.5%, below its pre-COVID-19 level.
Illinois: The June RMI for Illinois climbed to 70.6 from 67.8 in May. The farmland-price index sank to 76.2 from 78.8 in May. The state’s new-hiring index declined to 72.0 from 74.4 in May. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Illinois’ Rural Mainstreet nonfarm employment remains more than 27,000 jobs, or 2.1%, below its pre-COVID-19 level.
Iowa: The June RMI for Iowa sank to 63.7 from 79.9 in May. Iowa’s farmland-price index dipped to 72.7 from 78.6 in May. Iowa’s new-hiring index for June climbed to 68.5 from 68.4 in May. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Iowa’s Rural Mainstreet nonfarm employment remains more than 15,000 jobs, or 2.3%, below its pre-COVID-19 level.
Kansas: The Kansas RMI for June decreased to 71.8 from 83.8 in May. The state’s farmland-price index declined to 76.8 from May’s 80.6. The new-hiring index for Kansas fell to 72.6 from 76.2 in May. As a result of recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Kansas’ Rural Mainstreet nonfarm employment is 400 jobs, or 0.1%, above its pre-COVID-19 level.
Minnesota: The June RMI for Minnesota sank to 72.4 from 81.7 in May. Minnesota’s farmland-price index fell to 77.1 from 79.5 in May. The new-hiring index for June declined to 72.9 from 75.1 in May. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Minnesota’s Rural Mainstreet nonfarm employment remains more than 7,000 jobs, or 1.4%, below its pre-COVID-19 level.
Missouri: The June RMI for Missouri slumped to 72.6 from May’s 87.8. The farmland-price index fell to 77.2 from May’s 82.6. The state’s hiring gauge decreased to 73.0 from 78.2 in May. As a result of recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Missouri’s Rural Mainstreet nonfarm employment is more than 1,000 jobs, or 0.3%, above its pre-COVID-19 level.
Nebraska: The Nebraska RMI for June sank to 74.3 from May’s 88.0. The state’s farmland-price index declined to 78.0 from last month’s 82.7. Nebraska’s new-hiring index rose to 73.8 from 78.3 in May. As a result of recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Nebraska’s Rural Mainstreet nonfarm employment is more than 6,000 jobs, or 2.1%, above its pre-COVID-19 level.
North Dakota: The North Dakota RMI for June climbed to 56.7 from May’s 53.8. The state’s farmland-price index sank to 69.2 from 72.0 in May. The state’s new-hiring index was unchanged from May at 65.0. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that North Dakota’s Rural Mainstreet nonfarm employment remains more than 13.200 jobs, or 8.2%, below its pre-COVID-19 level.
South Dakota: The June RMI for South Dakota weakened to 74.0 from May’s 85.9. The state’s farmland-price index dropped to 77.9 from 81.6 in May. South Dakota’s June hiring index declined to 73.7 from 77.2 in May. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that South Dakota’s Rural Mainstreet nonfarm employment remains 400 jobs, or 0.2%, below its pre-COVID-19 level.
Wyoming: The June RMI for Wyoming dropped to 65.5 from May’s 78.4. The June farmland and ranchland-price index climbed to 73.5 from 72.3 in May. Wyoming’s new-hiring index fell to 69.4 from May’s 73.5. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Wyoming’s Rural Mainstreet nonfarm employment remains more than 10,500 jobs, or 5.4%, below its pre-COVID-19 level.
