(Radio Iowa) – Inflation is rising, trade numbers are falling, and the overall Midwestern economy is slowing, according to a monthly survey of supply managers in Iowa and eight other states. Creighton University economist Ernie Goss says a score of 50 is considered growth neutral on the zero-to-100 scale, and the region may soon be seeing the numbers contract.

“The overall reading from the June survey was down to 50.7 from May’s reading of 51.0,” Goss says. “Now, this is still above growth neutral, but the direction of the manufacturing economy, according to our index, is slowing down, getting slower and slower and slower.” The regional manufacturing employment score for June stayed below growth neutral, while imports are spiraling, down to a score of just 30 on the zero-to-100 scale, which Goss says is a real concern.

“The export reading was also not good, it was 43.4 and that’s just not where we want to see it,” Goss says. “In other words, the trade numbers, we’re looking like more of a mercantilist society where each nation is trying to be more self-sufficient, and we economists don’t support that movement.” Manufacturers stocked up on supplies earlier in the year, before the threatened tariffs were implemented and now, Goss says, trade in both directions is drying up.

Ernie Goss

Goss says he’s also worried about housing, which is a key indicator of an economy’s health. “The housing sector is slowing down much, much, much faster, slowing down faster, and that’s a real concern of mine going forward,” he says. “The Federal Reserve has indicated they’re not going to move on interest rates in July. That is foolish. They should be reducing interest rates at their July 30th meeting. That should be done and it will probably not be done.”

Iowa’s overall score for June fell further below growth neutral to 48, a drop of nearly two full points since May. Goss says a federal report shows Iowa’s manufacturing sector exported five-billion dollars in goods during the first four months of the year, compared to five-point-four billion for the same period last year, a drop of more than eight-percent.