The Mid-America economy showed modest improvement in March, but ongoing global tensions and rising inflation continue to cloud the outlook, according to Creighton University economist Ernie Goss.
Goss, who oversees the monthly Mid-America Business Conditions Index, said the region’s manufacturing sector expanded at its fastest pace in a year, even as broader economic concerns persist. The overall index climbed to 55.6 in March, up from 54.7 in February and the highest reading since March 2025, indicating continued growth in the nine-state region.
Despite the improvement, Goss said the economy is facing competing pressures that make it difficult for policymakers to respond.
“And that’s really causing some real problems… on the economic side, this is putting the Federal Reserve… between a rock and a hard place,” Goss said, noting the combination of slowing growth and persistent inflation.
A major factor influencing the economic outlook is the ongoing conflict involving Iran. More than 61% of supply managers surveyed said the situation is negatively affecting their purchasing decisions, contributing to supply chain disruptions and rising costs.
Inflation remains a key concern. The wholesale price gauge jumped to 69.4 in March, up sharply from 60.2 the previous month, signaling elevated price pressures across the region. Goss noted the survey was conducted before recent increases in oil prices, suggesting additional inflationary pressure could still be ahead.
Supply managers expect prices for inputs to rise by roughly 5% over the next year, driven in part by higher energy costs and ongoing disruptions.
At the same time, there were some positive signs in the labor market. The employment index rose above growth neutral to 50.7, marking the first expansion in manufacturing jobs since March 2025. Goss called the increase modest but encouraging after nearly a year of contraction.
“After 11 straight months of below growth neutral readings, it’s the first time above growth neutral,” he said.
Even with improving manufacturing conditions, other parts of the regional economy remain under pressure. Goss said agriculture continues to struggle, and overall hiring remains limited with some layoffs still occurring.
Looking ahead, Goss expects the Federal Reserve to hold off on cutting interest rates in the near term, despite some support for rate reductions among supply managers.
“I think the Fed took the correct approach… and I think they’ll take the same approach in April and not reduce interest rates,” he said.
He warned the economy could be moving toward stagflation — a combination of slow growth and high inflation — if current trends continue.
Confidence among businesses is already beginning to slip. The six-month outlook index fell to 53.2 in March, reflecting growing concerns about rising energy costs and supply chain challenges.
While manufacturing is showing gradual improvement, Goss said uncertainty tied to global conflict, inflation, and Federal Reserve policy will remain key factors shaping the region’s economic trajectory in the months ahead.