NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — Creighton University economist Ernie Goss is not surprised that his Rural Mainstreet Index dipped below growth neutral to its lowest level since October 2022.
"I will say, it was somewhat expected, just a lot of negatives out there," Goss said. "Not just the bank problems. Oil prices, for example, dropped dramatically this month. We also had the 10-year Treasury, which is an important signal, an important measure of the economy, drop by almost 50 basis points, or half a percentage point, so those are some real, absolutely not good numbers out there."
Another concern is that the growth of land values is slowing considerably.
"We asked the bank CEOs to look out the next 12 months and say how much do you expect farmland prices to change by, it's only one percent growth," Goss said. "That's after a 9% growth over the past 12 months. The bankers are already seeing not as much growth in farmland prices. Farmland prices in our survey have now grown for 30 straight months. The farm sector, it tends to be in pretty good shape out there. Lots of other businesses on what we call Rural Mainstreet that aren't doing that well."
Goss does see a continued downturn on the horizon.
"The odds are, we're going to see a recession by the end of the year, or perhaps the first quarter of next year," Goss said. "The deal is done, almost. We're talking about some real not such good numbers. Their surveys, the sample response rates are coming down. In other words, what we call the confidence interval for any, like the unemployment rate, the employment, all those numbers are getting more and more questionable, because of the response rate from businesses that respond to the Bureau of Labor Statistics. There's some doubts about the validity of some of the numbers."
Goss said it will be important to watch the Federal Reserve's actions later in the month. He thinks they may hold fast on interest rates instead of going through with another hike.
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