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Mid-America Region Will See Slower Economic Growth as 2022 Begins

Lukas Partners supports Creighton University Economics professor Ernie Goss, Ph.D., to create and distribute a monthly video that summarizes his Mid-America Business Conditions Index, a survey of supply managers. This is a leading economic indicator for the nine-state Midwestern region that stretches from Minnesota to Arkansas.

You can view Dr. Goss’ December recap video at:

The Creighton University Mid-America Business Conditions Index showed a very strong reading in December, which indicates positive growth for manufacturers, according to Dr. Goss. However, he anticipates that supply chain bottlenecks, labor shortages and inflation will lead to slower economic growth in first quarter of 2022.

According to Dr. Goss, more than half of supply chain managers reported that the Omicron COVID-19 variant slowed deliveries in December, though delivery conditions improved from November. Meanwhile, trade is strong, with exports up 20-25% compared to this time last year.

In terms of employment, hiring declined in December, with both regional and U.S. employment down 2.6% from pre-pandemic levels.

Inflation also declined significantly from November to December. Even though inflation is expected to cool in the first quarter of 2022, Dr. Goss says inflationary pressures will remain. As the economy continues to grow, Dr. Goss expects short-term and long-term interest rates to begin rising in the first half of 2022.

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