North Dakota and eight other states comprising “mid-America,” are in the midst of surging economic growth.
But with that growth, inflation is also rising while a labor shortage is dragging down employment growth in mid-America.
These are among the latest findings in the April report of the Mid-America Business Conditions Index, generated by Creighton University.
The index is considered one of the leading economic indicators for the nation and covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The Business Conditions Index, which ranges between 0 and 100, expanded to a strong 64.5 in April, up from March’s 62.1.
This is the 17th month in a row the index has remained above 50.0, which is considered “growth neutral.”
“It is also the highest reading in 12 years, pointing to strong growth for the region over the next three to six months,” according to the report.
The downside is a labor shortage in the region and inflation.
“The share of supply managers reporting labor shortages continues to grow and is now limiting employment growth for the region,” the report states.
In terms of inflation, the measure for it in the index is at its highest level in seven years.
Both our regional wholesale inflation index and the U.S. inflation gauge are elevated. I expect this elevated inflation to begin to show up at the consumer level,” said Ernie Goss, director of Creighton University’s Economic Forecasting Group. “As a result, I expect the Federal Reserve’s interest rate setting committee to raise short-term interest rates by one-quarter of one percentage point (25 basis points) at its June meeting.”
While, the mid-American states in the survey are doing well as a group, North Dakota was one of the weaker performers individually.
“Over the past 12 months, the North Dakota economy has lost 1.3 percent of its nonfarm jobs (below regional average), increased durable-goods manufacturing jobs by 7.0 percent (above regional average), and shed 1.2 percent of its nondurable goods manufacturing jobs (below regional average),” said Goss.