The monthly Rural Main Street Survey of rural bankers in 10 Midwest and Plains states that include Nebraska, Wyoming, and the Dakotas indicates the regional economy is doing well now, but could be facing tough times ahead.
The bankers surveyed look positively at almost all the categories it covers – farming and ranching, farm equipment sales, home sales, banking, hiring, and retail sales – but not on where they think the economy will be 6 months from now.
The business confidence index is at its lowest level since spring 2020 when the COVID-19 pandemic had just started.
Creighton economist Ernie Goss, who oversees the survey. says rising inflation, global trade tensions, Russia’s invasion of Ukraine are all helping make the bankers pessimistic for the coming months.
Goss himself shares many of their concerns and says a recession is becoming more likely as the Federal Reserve raises interest rates to fight inflation and the dollar strengthens with economic troubles around the world.
Goss predicts slower job growth in the months ahead as the stronger dollar makes U-S retail goods and agricultural commodities and products less-competitively priced abroad.
He also thinks the Federal Reserve should have started raising interest rates last year to lessen the shock to the economy and that it has no choice but to raise them now despite the likelihood of triggering a recession by early next year.