Slow job growth hurting Mid-America economy

By Reuters
Posted Nov. 1, 2010 at 10:14 a.m.

Slower-paced economic growth is in store for nine U.S. Midwest and South-Central states, according to a survey of supply managers on Monday.

Creighton University’s Business Conditions Index fell to 52.3 in October from 56.3 in September. A reading of 50 is considered growth neutral, while a reading above that signals expansion over the next three to six months.

“Since July, the leading economic indicator has been trending downward and indicates slower growth in the months ahead. Even so, surveys are not pointing to a double dip recession,” said Creighton University Economics Professor Ernie Goss in a statement.

That, however, could change if the federal income tax cuts that expire at year end are not extended by Congress, he said, adding a tax increase “could push the fragile regional economy back into recession.”

Meanwhile, the survey’s employment index dipped to 50.6 in October from 53.2 in September, pointing to “positive, but very weak job growth in the months ahead,” Goss said.

The prices-paid index, which tracks costs of raw materials and supplies, remained in inflationary territory at 69.9 last month, down slightly from 71.1 in September.

Supply managers were surveyed in Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

The Omaha, Nebraska-based Creighton Economic Forecasting Group has conducted the monthly survey since 1994, using the same methodology as the National Institute for Supply Management.

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