Thursday, December 30, 2010

Federal Reserve: Rural Economy Driving Economic Growth

The Ag sector has been the shining star that’s kept the overall economy moving in the right direction. Not only has it helped keep GDP in positive territory this last year, it will provide a needed boost to move the economy forward faster in 2011.

Evidence of this is found in a report recently released by the Federal Reserve Bank of Kansas City that suggests America’s rural economy is improving. “A Rural Rebound in 2010” reviews a number of key indicators and asks the question, “Can the rural economy lead the nation’s recovery again in 2011?” The answer is Yes.

According to the report, farm incomes were buoyed by overall global economic growth of 5%, which drove a 16% increase in overall agricultural exports. The USDA has forecasted a 31% growth in real net farm income over 2009.

This, in turn, influenced strong growth in rural economies, where Main Street experienced a boost. The report comments:
Despite the weak housing market, the rural economy strengthened as the year progressed, often outperforming its metro peer.

The report concludes with a prediction that rural economies will lead overall U.S. economic growth in 2011.

Read the report

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