Check Up on Nebraska & U.S. Economies
The Nebraska economy grew by 1.4 percent in August according to a measure used by the Bureau of Business Research (BBR) at the UNL College of Business. The August change continued the alternate pattern of growth/decline in the measure over the past six months. The measure includes factors like electricity sales, private wages, and business conditions, all of which improved during August, along with agricultural commodities which were off slightly for the month.
The BBR also reported its Leading Economic Indicator for Nebraska (LEI-N), a forecast of the state of the Nebraska economy in six months, fell by 1.89 percent in August. The August drop followed a dramatic uptick in July (Figure 1). The BBR suggests the changes in the LEI-N for July and August “imply modest economic growth in Nebraska at the end of 2019 and the beginning of 2020.” Several components of the LEI-N indicated a slowing economy like growth in building permits, airline passengers, initial unemployment claim, and manufacturing hours. However, business expectations for greater sales and employment were a bright spot.
The U.S. gross domestic product grew at 2 percent annual rate during the second quarter of the year according to the U.S. Commerce Department. The pace of growth was much lower than the 3.1 percent growth clip the economy registered in the first quarter of the year and economists expect the economy to grow at 2.2 percent for the year, less than last year’s 2.9 percent rate. The fading impact of the federal tax cuts, slower global economic growth and headwinds created by the ongoing trade disputes are cited as reasons for the slowdown. The economy is now in its 11th year of recovery, the longest on record.
Figure 1. Change in Leading Economic Indicator for Nebraska