Is the country headed toward economic recession? Economists say so.
Creighton University Economics Professor Dr. Ernie Goss says job losses and inflationary pressure is pushing the mid-America region toward recession. Goss conducts a monthly economic survey of the nine state region, which includes North Dakota. The business conditions index for the month of November dropped to 42.2 overall, and in North Dakota it dropped to 47.2. Any reading below 50 indicates economic slowdown.
Goss says while North Dakota is showing stronger numbers than most states in the region, it is still struggling under the weight of economic pressures.
"When you look over the last twelve months, North Dakota's manufacturing sector has been flat in terms of employment. The wage rate, in North Dakota, has been moving less than the rate of inflation. So wages, when you adjust the wage rate for inflation, the number is not good."
Goss says interest rate cuts are also not expected in the near future. He says the Fed is treading carefully.
"The inflation rate right now is about three to four percent - that's still well above the Fed's target. And investors seem to be ignoring that, saying, 'well, the economy is so weak that the Fed will have to reduce rates.' But the problem with that is, the Fed is looking back to the 1970s, and they remember when the Fed did that very thing and what we got was too much inflation, and a recession. So the Fed is not going to reduce interest rates, at least with what we're talking about today."