Weeks after Katrina and Rita slammed the Gulf Coast, the economic impact is beginning to ripple through middle America.

The keepers of a Midwest economics index reported lower business conditions and confidence in September. The overall index was down a half point, to 59.9, from 60.4 in August.

The scale is from 0 to 100 and anything above 50 indicates business is in an expansionary mode. It is the lowest level since 2001.

The survey's authors said the two hurricanes were major economic factors. Rising energy prices and federal relief spending are a major concern, according to the index. Employment was also down. The index that tracks hiring was at its lowest since December of 2003.

An economics professor at Creighton University which sponsors the survey said things don't look much better for coming months. Rising interest rates, a projected record deficit and the monumental trade deficit on the horizon point to little to no relief as we enter the year's final quarter.

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