Economy still cooling in Omaha economics professor survey

Slow job growth is expected well into 2007 as the economy and inflationary pressures continue to cool, according to Tuesday's report on a December survey of Midwest supply managers and business leaders.

The employment index climbed for the first time since May but only to 53.1 from November's tepid 50.5, said Creighton University economics professor Ernie Goss, who conducts the survey. An index greater than 50 indicates economic growth.

"Fourth-quarter job growth in the region was about one-fourth of what it was in the first quarter of 2006," Goss said.

The overall business conditions index in the nine-state region declined to 53.8 from November's 54.1, its lowest level since December 2002, Goss said.

At the same time, the prices-paid index, which indicates inflationary pressures, dropped to 68.3 from November's 69.4. Goss said he did not expect the Federal Reserve to change interest rates until the second quarter, when it could cut them.

December results were weaker for durable goods manufacturers as the downturn in housing spilled into heavy manufacturing. Renewable energy production, including ethanol, and growth in value-added services bolstered the overall index, Goss said.

Nebraska's overall index was 60.5, down from November's 63.1. Iowa's dropped to 40.4 from November's 42.0.