OMAHA, Neb. (AP) -- The worst of the recession may be over for the Midwest, an economist said Tuesday.
Creighton University economics professor Ernie Goss conducts a monthly survey of purchasing managers in the nine-state region. An index above 50 signifies growth in manufacturing, while a figure below 50 shows contraction. December's overall index of 43.9 was only a slight increase from November's 43.1, but marked the second increase in three months and was a reason for some optimism.
With help from record short-term interest rates and lower energy prices, that could mean the region has seen the worst of the recession, Goss said.
"I expect the economy to move out of the recession in the second quarter of 2002," he said. "Based on recent survey results, the upturn will be more like a Nike swoosh than a V."
With few concerns over inflation and the prices-paid index rising only slightly during the past month, short-term interest rates should remain low over the next several months, he said.
While concerns remain over the global economic slowdown, Goss said he doesn't expect the Federal Reserve to lower interest rates this month.
Continued rate reductions can be expected if the recovery stalls, he said.
The region's employment index increased slightly in December from 40 to 41.2, but Goss said he expects more job losses for most states in the region. About 55,000 jobs have been lost in the region since the start of the recession last March.
"I do expect the job loss rate to decline significantly in the first quarter of 2002," Goss said.
An improvement in the production index to 44.1, up from November's record low 43.7 accompanied the low employment reading.
"Recent economic pullbacks in the region have been focused primarily in durable and nondurable goods manufacturing with the transportation sector showing significant weakness since Sept. 11," Goss said.
Exports increased slightly but remained slow in December as the high value of the dollar made U.S. products expensive abroad. The global recession also took a toll on regional businesses that depend heavily on exports, Goss said.
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