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3/4/2004

Manufacturers seeing rising inflationary pressure

The Associated Press

DENVER — A pair of reports issued Wednesday suggested good news for the Rocky Mountain economy.
The Conference Board said the Rocky Mountain Region — Montana, Wyoming, Idaho, Colorado, New Mexico, Arizona, Utah and Nevada — had the biggest gain in consumer confidence in the past year. The agency said its Consumer Confidence Index for the region climbed from 68.8 to 103.4 from February 2003.
Separately, the monthly Creighton University survey of businesses in Wyoming, Utah and Colorado found conditions in February indicated a strong economy.
The report’s business conditions index for the region fell to 59.8 from 61.1 in January. The survey relies on data from supply managers and business leaders.
Jim Knudsen, an economist with the Nebraska school said rapidly rising prices for steel and other raw materials have not yet reached consumers in the region and likely won’t if the Federal Reserve raises interest rates as expected.
He said he expected the Fed to raise interest rates in May from historically low levels, which would ease the threat of excessive inflation for consumers.
Knudsen said signs of a strengthening economy included improved hiring in durable goods manufacturing and the weakening of the dollar.
“The weaker dollar continues to make U.S. goods cheaper abroad and imported goods more expensive in the U.S.,” he said. “The cheaper dollar helped maintain the new export orders index at 50, even in the face of the ban on imported beef by several important U.S. trading partners.”
Numerous countries banned imports of U.S. beef after mad cow disease was found in a Washington state dairy cow in late December.