A report released Monday revealed continued economic recovery for North Dakota and the Midwest.
"The rest of the region is catching up, economically speaking, to North Dakota. Durable goods producers experienced a much better January than nondurable goods manufacturers," said Ernie Goss, director of Creighton University's Economic Forecasting Group, which conducts a monthly survey of supply managers in a nine-state area.
After two months of moving below growth neutral, North Dakota's leading economic factor reached 50.5 for January, up from December's 44.3 and November's 48.4.
Collectively, the Mid-America regional index increased to 54.7 from December's 50.3 and November's 47.5. An index of 50 is considered growth neutral.
Goss said the readings over the past several months have indicated that regional economic recovery is picking up steam, but is still fragile.
"However, the likelihood of dipping back into recessionary territory has diminished significantly," he said, but, "economic conditions remain less healthy for rural areas."
Employment has been one factor in the recovery with more supply managers reporting employment increases than decreases in January, but continued job losses have helped spur the cost of raw materials and supplies.
"The prices-paid index has more than doubled over the past year," Goss said. "I expect inflation at the consumer level to top 3.3 percent as early as the middle of 2010. This is a full percentage point above the Fed's acceptable level."
This view is contrary to the Federal Reserve's prediction of subdued inflation trends, according to the report.
Looking ahead at the next sixth months, economic optimism remains strong.
"Record low interest rates, improving housing markets and stabilizing unemployment rates are keeping the economic optimism high," Goss said.
Since 1994, the Creighton Economic Forecasting Group has conducted monthly surveys of supply managers in Oklahoma, Arkansas, Missouri, Kansas, Nebraska, Iowa, South Dakota, Minnesota and North Dakota.