Ernie Goss Rates Quotations

For most states in the region, unemployment rates moved lower and job growth higher as manufacturers, finance firms and energy providers details growth. However, telecommunications remained weak and construction cooled in January.

I expect higher commodity prices and escalating short-term interest rates to push regional growth down significantly in the second half of 2006.

While our inflation gauge and most national inflation indicators point to somewhat lower inflationary pressures ahead, I expect the Federal Reserve Open Market Committee to raise interest rates at its next meeting on Jan. 31. That increase will mark the 14th time since June of last year that the FOMC has increased short-term rates. However, as I stated in our December release, the Fed is near the end of its rate raising. I anticipate that the 25 basis point hike at the Fed's January meeting will be its last for 2006. Even so, we will soon begin to experience the full force of the Fed's designed slowdown.

The Mid-America regional economy began 2005 like a lion, but higher interest rates and elevated energy costs forced the region's economy to end the year like a lamb.

Higher interest rates are cutting a bit into confidence, and now oil prices are going back up to post-Katrina levels.

It's going to be stronger in the first quarter and in the end of the second quarter. It's going to weaken as higher interest rates set in.

The construction industry and transportation sector in Kansas have pushed 2005 growth into the very strong range. However, higher interest rates will slow growth for both industries in the first half of 2006. The rate at which our Asian trading partners open their borders to U.S. beef will be an important factor affecting growth for the state in 2006.