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(Midwest) -- The Midwest economy is showing signs of shrinking, according to September’s Mid-America Business Conditions Index.
"Now it's 49.8, which is obviously below growth neutral, 50.0, and that's down from August's 50.5. Now what it's doing is bouncing up and over, back and forth, between growth neutral and below growth neutral," said Midwest economist Ernie Goss.
The index surveys supply managers across nine states, from Minnesota to Arkansas. In the latest report, roughly 60 percent of supply managers said higher tariffs were having little to no effect on their purchasing decisions.
"Outlook is not good, depending of course on what happens with Congress and the president. The federal government is running a deficit of 2 trillion to 3 trillion dollars this year, that swamps any impact that the Federal Reserve can have," said Goss.
He says the index shows imports and exports weakened in September, while wholesale prices increased compared to the previous month.
Hiring is also trending down across the region.
"September hiring index is 44.9 and that's getting down into recessionary ranges, and of course manufacturing dipping below and into and out of recession, and that's down from August's 45.6," said Goss.
He adds that the regional manufacturing sector, spanning from Minnesota to Arkansas, lost jobs in September for the sixth straight month.