Missouri’s economy, manufacturing outperform other Midwest states

(The Center Square) – Missouri’s monthly jobs report showed the state’s economy continues to create jobs while the Midwest is losing manufacturing jobs.

Missouri’s non-farm payroll employment increased by 5,200 jobs in September, and the seasonally adjusted unemployment rate increased by one-tenth of a percentage point from August to 2.9%.

When reviewing the past 12 months, total payroll employment in the state increased by 43,700 jobs compared to September 2022. Private education and health services created the most jobs (14,700) followed by leisure and hospitality (10,500) and manufacturing (6,300). Governments added 8,600 jobs during the last 12 months as local political subdivisions added 6,800 positions, state government added 1,100 and the federal government increased by 700. The state lost 6,300 jobs in mining, logging and construction since last September.

The Creighton University Mid-America Business Conditions Index rated the Midwest economy, comprised of nine states, above “growth neutral” for the first time since June. However, many indicators were weak. The index increased to 52.5 in September from 49.5 in August.

“The Mid-America regional manufacturing economy has weakened from earlier in the year and from the same period in 2022,” said Ernie Goss, director of Creighton University’s Economic Forecasting Group and the chairman of the regional economics department in the Heider College of Business.

Creighton’s regional hiring index increased to 51.5 in September, a growth neutral number, from 47.7 in August. The U.S. Bureau of Labor Statistics found manufacturing employment in the Midwest decreased four of the past five months, according to the survey.

“For the first nine months of 2023, Creighton’s monthly survey indicated steady employment growth with levels maintained due to manufacturers’ labor hoarding,” Goss said. “However, employment readings over the past several months signal an upturn in layoffs in the region.”

Missouri’s index in the Creighton ratings increased one-tenth of a percentage point to 59.6 in September.

The U.S. International Trade Association reported Missouri’s manufacturing exports increased by 8.8% to $9.2 billion during the first seven months of 2023, compared to the same period in 2022 when its exports were $8.3 billion. Transportation equipment was the state’s leading manufacturing export and increased 39.6% in 2023 compared to the same period in 2022.

Goss said the Creighton research indicates a recession is still possible during the next two quarters.

“Almost one-third of supply managers surveyed, or 31.8%, expect a recession before the end of the first quarter of 2024,” Goss said.

Goss also predicted the Federal Reserve will raise interest rates again before the end of the year.

“The rapid expansion in federal government spending will push the Federal Reserve to keep its foot on the economic brakes via raising short-term rates,” Goss said. “I expect one more rate hike in quarter four — with no change at the Fed’s Oct. 31-Nov. 1 meetings and a 25 basis point (0.25%) increase at its meetings on Dec. 12-13. Furthermore, I expect Federal Reserve Chairman Jerome Powell to restate the Fed’s commitment to reducing the Fed’s balance sheet, which will put upward pressure on long-term interest rates.”

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