Survey: Regional Economy Good, But Tougher Times Expected

April 22, 2022, noon ·

Rural Mainstreet report headline

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The economy is doing well in 10 Midwest and Plains states, but there could be tough times ahead, according to a new survey of bankers in the region.

A quick look at the categories in the Rural Mainstreet Index shows area bankers are positive on a number of fronts: farming and ranching, farm equipment sales, banking, hiring, and home and retail sales. The one exception is confidence about the future. There, the survey says, Russia’s invasion of Ukraine, global trade tensions and rising inflation have pushed business confidence to its lowest level since the Spring of 2020, near the start of the pandemic. With the Federal Reserve raising interest rates to fight inflation, and the dollar strengthening relative to the currencies in economically troubled Europe and China, Creighton University economist Ernie Goss said a recession is becoming more likely.

“We’re going to see slower job growth in the weeks and months ahead. And we’re also going to see a higher value of the dollar. That dollar’s been growing at t a pretty brisk pace. And that puts downward pressure on agricultural commodity prices even though we haven’t seen it yet. The higher value of the dollar makes U.S. agricultural goods and manufactured goods less competitively priced abroad,” Goss said.

Goss said he thinks the Federal Reserve should have begun raising interest rates last year to lessen the shock to the economy, but adds that the central bank has little choice about raising rates now, despite the likelihood of a recession later this year or early next year.