Survey results, while somewhat weaker than the rest of the nation, continue to point to growth for Missouri in the months ahead. Of course challenges and opportunities related to automobile industry restructuring will be an important driver in the near and intermediate term. |
The 15 Fed rate hikes and higher energy prices, even with the warmer than expected winter weather, are having negative impacts on confidence among regional supply managers and business leaders. |
The bankers in our survey reported economic weakness across the board for February with readings of 28.8 for retail sales, 44.0 for new hiring and 38.5 for home sales. |
The construction industry and transportation sector in Kansas have pushed 2005 growth into the very strong range. However, higher interest rates will slow growth for both industries in the first half of 2006. The rate at which our Asian trading partners open their borders to U.S. beef will be an important factor affecting growth for the state in 2006. |
The Kansas economy began the year on a somewhat softer note than the rest of the region. However, firms reported solid job growth for January with durable goods producers detailing much stronger conditions than non-durable goods firms in the state. |
The Mid-America regional economy began 2005 like a lion, but higher interest rates and elevated energy costs forced the region's economy to end the year like a lamb. |
The most recent rate increases, and a rate hike at its next meeting, in my judgment will slow growth to an unacceptably low rate for the region and the nation. |
The Mountain States region experienced growth significantly higher than the rest of the nation. The region added 53,000 jobs, an annual growth rate of 2.9 percent, in the first half of 2005 but added only 41,000 jobs, an annual growth rate of 2.2 percent, in the second half of the year. |
The rate at which our Asian trading partners open their borders to U.S. beef will be an important factor affecting growth for the state in 2006. |
The trend in economic reports from supply managers in our survey has been fairly positive since October of last year following some of the negative shipping impacts from Hurricane Katrina. Companies with strong ties to the state's growing ethanol industry reported solid growth for February but were very optimistic about future economic growth for this sector. |
There's every reason to have some concern there. |
Transportation firms reported continuing economic weakness. While 2006 is likely to be a positive year for the Oklahoma economy due to an improving telecommunications sector and expansions in business service firms, the closing of GM operations in Oklahoma City will produce some fairly negative economic consequences. |
Utah began 2006 on a strong note, but on a pace somewhat below that of 2005. |
While our inflation gauge and most national inflation indicators point to somewhat lower inflationary pressures ahead, I expect the Federal Reserve Open Market Committee to raise interest rates at its next meeting on Jan. 31. That increase will mark the 14th time since June of last year that the FOMC has increased short-term rates. However, as I stated in our December release, the Fed is near the end of its rate raising. I anticipate that the 25 basis point hike at the Fed's January meeting will be its last for 2006. Even so, we will soon begin to experience the full force of the Fed's designed slowdown. |