The latest report from Creighton University's monthly survey of supply managers and procurement experts in nine Mid-America states indicates that economic growth remains in a very healthy range with elevated inflationary pressures. On the other hand, the overall index from Creighton's monthly survey of bank CEOs in rural areas of 10 states indicates the Rural Mainstreet Economy continues weak but "the negatives are getting less negative."
Here are near-term forecasts from Creighton University Professor Ernie Goss, Ph.D.
- Expect two more Federal Reserve rate hikes by the end of 2018 (0.50% basis points in all).
- There should be a pickup in home prices as building supply prices are boosted by the Florida and Houston post-hurricane rebuilding.
- Q4 2017 GDP growth will come in at an annualized rate of 3.4%. This will make three straight quarters of GDP growth above 3.0%. The last time this occurred was 2004-05.
Dr. Goss outlines these opportunities:
- The U.S. non-farm payroll expanded by 228,000 in November and the unemployment rate remained at 4.1%, a 16-year low.
- From November 2016 to November 2017, average hourly wages grew by 2.5% to $26.55 per hour. Not great, but improving.
- Over the last 12 months, the consumer price index (all items) jumped by 2.0% (a Goldilocks economy, not too hot, not too cold?)
And, he outlines this "bad news:"
- For November, the labor participation rate, the percentage of those over age 16 who are available for work and working or looking for work, was unchanged at 62.7% (not this low since 1970s).
- The U.S. budget deficit rose to $63 billion deficit in October as Washington ramped up spending. The government boosted outlays in October to $299 billion, up $31 billion from the same month of last year.
