Fewer Firms Reporting Layoffs in Midwest SurveyFewer layoffs and continued optimism mark a February regional economic survey for nine Midwest and Plains states, according to a report released Tuesday.
By: Associated Press,
OMAHA, Neb. (AP) — Fewer layoffs and continued optimism mark a February regional economic survey for nine Midwest and Plains states, according to a report released Tuesday.
The Business Conditions Index for the Mid-America region rose to 63.2 last month from 58.9 in January, the report said. It was the 15th straight month that the index had come in above growth neutral.
"The Federal Reserve's policy of record low interest rates producing a cheap dollar is providing a significant boost to the regional economy," said Creighton University economics professor Ernie Goss, who oversees the survey.
"Since December 2008, the Fed has maintained short-term interest rates (the funds rate) between zero and 0.25 percent. This has contributed significantly to an 18 percent increase in farm product prices over the past year and to very rapid growth in exports," Goss said in the report.
The survey of supply managers and executives and the report use a collection of indexes ranging from zero to 100. Organizers say 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 are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The survey said 11.3 percent of firms reported layoffs last month, compared with 24 percent reporting layoffs at the beginning of the nation's economic rebound in July 2009.
"Firms in nonurban areas are reporting much stronger hiring than their counterparts in urban areas of the region," Goss said.
Looking ahead, the survey's business confidence index remained strong, although it dipped to 71.0 from 74.8 in January. Goss blamed $100-a-barrel oil for the slip.
"Nonetheless, supply managers remain confident about future economic conditions even though unemployment rates remain well above historical averages for most states in the region," he said.
Goss also expressed concern about what he called "unsustainable increases in our inflation gauge."
He said the supply managers who were surveyed said they were anticipating an increase in prices of about 4.4 percent over the next six months.
"Our surveys show no signs that this pace will slow in the coming months," Goss said. "I expect long-term interest rates to grow rapidly in the second half of 2011 to compensate lenders for rising inflation."
Other components of February's overall index were:
— Inventories at 61.9, compared with 55.8 in January.
— Trade rose to 57.7 from 55.5 in January.
— New orders rose to 65.7 from January's 60.2.
— Production or sales up to 65.6, from 62.7.
— Delivery lead time rose to 64.7 from 57.9.