Trade tariffs, among other issues, are taking their toll on the Midwest's fortunes, and the declining conditions could create large issues for the U.S. economy, as the combined gross domestic products for Great Lakes and Plains states make up almost one-fifth of the United States' GDP.
Farming has had significant issues this spring and summer, with agricultural exports to China, especially soybeans, tanking over the past two years, reports The Wall Street Journal.
Farmers have been hit hard by wet planting seasons, but the lack of buyers has kept prices down for soybeans and corn, hitting farmers even harder than usual.
According to the American Farm Bureau Federation, bankruptcies and loan delinquencies are on the rise. For example, in the first quarter of 2019, 2.5% of commercial real-estate agriculture loans were more than a month past due, up from 2.1% the previous quarter. Other delinquencies in non-real-estate loans are also rising above the historical average.
Nonfarm business activity is also struggling, according to the Federal Reserve Bank of Chicago, which tracks Iowa, Indiana, Illinois, Michigan, and Wisconsin through the Midwest Economy Index. August marked the fifth straight month for such activity to fall in the negative range, the Chicago Fed reported, and July's reading, at -0.37, marked the lowest point since 2010.
The Chicago Business Barometer, which is measured through swings in orders for Chicago businesses like Boeing, dropped to 47.1 in September, from 50.4 in August. The index has not often dropped below 50 since the last recession, the Wall Street Journal noted.
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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