By NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — Creighton University economist Ernie Goss sees the economy's growth slowing as he surveys leadership in the Midwest, but the Federal Reserve has already said it's going to hit the brakes via interest rate increases in 2022.
"The economy is slowing down, but inflation is not," Goss said. "They really need to raise interest rates, which slows the economy down even more. At least, it cools inflationary pressures. This is somewhat like what we saw in the 80s and the latter part of the 70s when we had oil prices increasing inflation, but slowing the economy, so we're right there again."
It hasn't caused a recession, but it is something that bears watching, because inflation is causing its own problems.
"It cuts into everybody's wages," Goss said. "Wages have been growing this year at a pretty good pace. Unfortunately, prices have been growing at an even faster pace. What that does, it reduces the value of the dollar. It makes it very hard for individuals and families and businesses to do any sort of planning."
The one area where a weaker dollar has helped is in agriculture.
Agricultural commodity prices are better, which are very important to Kansas," Goss said. "We're talking about wheat, soybeans, corn, beef and pork, not as much, but still very good agricultural commodity prices. What the weak dollar does, and we've seen a very weakened dollar by the Federal Reserve, that makes our goods more competitively priced abroad, so the Chinese and other nations out there want to buy our products, because they've become relatively cheaper."
The Mid-America Business Conditions Index showed slowing growth in the Midwest region in January.