Fed Economist Finds Nervousness Among Southwest Minnesota Business Owners

Erick Garcia Luna, a regional economist at the Federal Reserve Bank of Minneapolis, visited southwest Minnesota last week to gather feedback from local businesses. As part of his job tracking the Fed's Ninth District, which covers Minnesota, the Dakotas, Montana, and parts of Michigan and Wisconsin, he met with businesspeople in Marshall and Lamberton.

Garcia Luna reported that there was a general sentiment of positivity and uncertainty among the business owners he spoke with. He noted that advancements in technology, policy effects, and geopolitical activity are influencing their outlook, causing a sense of 'nervousness'.

The economist cited labor supply as one of the main concerns, attributing it to an aging population and not enough people entering the workforce to replace retirees. Immigration also plays a role in this issue, he said. Inflation was another major topic, with 3.7% inflation currently surpassing the Fed's goal of 2%. Garcia Luna emphasized that blaming one factor alone is too simplistic.

The economist highlighted goods and energy inflation as significant contributors to the current economic climate. He noted that energy prices are particularly volatile due to recent global events, such as the Iran War. The agriculture economy also received attention from Garcia Luna, who stated that farmers in southwest Minnesota have been feeling the negative effects of the economy.