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October 26, 2022

Little Improvement in Nebraska’s Leading Economic Indicator

State Economic Growth to Stagnate Over Next Six Months
Nebraska Bureau of Business Research Leading Economic Indicator – October 2022
The University of Nebraska–Lincoln’s leading economic indicator (LEI), used to predict economic activity six months into the future, grew modestly in September, with a rise of 0.34%. Eric Thompson, department chair, K.H. Nelson College Professor of Economics and director of Bureau of Business Research, suggested the flat growth over the last few months indicates a stagnant economy for the state.

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Nebraska’s leading economic indicator grew modestly in September, according to the most recent report from the University of Nebraska–Lincoln. Designed to predict economic activity six months into the future, the leading indicator rose by 0.34%.

The modest increase in September followed a small decline in the indicator in July and August.

“The leading indicator has been essentially flat over the last three months, suggesting a stagnant economy at the end of 2022 and the beginning of 2023,” said economist Eric Thompson, department chair, K.H. Nelson College Professor of Economics and director of Bureau of Business Research.

The six components of Nebraska’s Leading Economic Indicator include business expectations, building permits for single-family homes, airline passenger counts, initial claims for unemployment insurance, the value of the U.S. dollar and manufacturing hours worked.

Three components of the leading indicator improved during September. Hours worked rose in the Nebraska manufacturing industry, as demand continued to grow for food products.

“The labor market also continues to strengthen in Nebraska,” said Thompson, as initial claims for unemployment fell in the state and respondents to the September Survey of Nebraska Business reported plans to increase employment over the next six months.

At the same time, rising interest rates are impacting the Nebraska economy.

“Higher interest rates lead to an increase in the value of the U.S. dollar, which creates challenges for agricultural producers, manufacturers and other businesses that compete in international markets,” said Thompson.

The full report and a technical report describing the indicators are available at the Bureau of Business Research website, https://bbr.unl.edu.