NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — Creighton University economist Ernie Goss says struggles in agriculture have pushed themselves over into his manufacturing survey, as well.
"This, of course, is a survey of manufacturing supply managers in nine, what we call the mid America states, which includes Kansas," Goss said. "The overall reading was below growth neutral for the month. That's the month of August. And this is the fourth time in this year."
Economic optimism is low in this month's survey.
"Approximately 35% see a recession as the number one challenge to their business, and that's even with a rate cut from the federal reserve, which is almost a hundred percent likely on September the 18th," Goss said. "Now the question becomes, is it a quarter percent cut or is it a half percent cut?"
Goss thinks they might consider a half percent cut if the jobs report is bad enough, but he actually noted that rate cuts have not historically held off recessions.
"Every recession since the 1950s, every one of those recessions has been preceded by significant rate cuts by the federal reserve," Goss said. "Back in the last time we had a deep recession back in 2008 and nine, the fed began cutting rates to near zero and launching new programs to stimulate growth, what we call quantitative easing. That was a mistake on their part then, and it's a mistake now."
Goss said that whatever the Fed chooses to do later this month likely will not have a meaningful effect between now and the November election.