Mid-America economy in fragile recovery - survey

CHICAGO Nov 2 (Reuters) - Business conditions in nine U.S. Midwest and South-Central states slumped in October, pointing to a fragile economic recovery in the region and the possibility of a double-dip recession, according to survey results released on Monday.

Creighton University's Business Conditions Index fell to 51.8 in October from 56.2 in September. A reading of 50 is considered growth neutral with readings above that indicating expansion over the next three to six months.

"This month's decline suggests that the economic recovery underway is going to be a disappointing one. In fact, the volatility and level of the overall index over the past several months, indicates that a double-dip recession is a growing possibility," said Creighton University Economics Professor Ernie Goss in a statement.

The survey's employment index also slumped, falling to 50.0 in October from 52.1 in September.

"Since October of last year, government data shows that the region has lost almost 425,000, or 3.2 percent, of its jobs," Goss said. "While our survey indicates the pace of job losses will diminish, I expect the region to continue to lose jobs."

Meanwhile, inflationary pressures continued to increase as the prices-paid index, which tracks the cost of raw materials and supplies, rose to 68.9 in October from 68.1 in September - marking the fifth consecutive month the index has been above 50.0.

Supply managers were surveyed in Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

The Omaha, Nebraska-based Creighton Economic Forecasting Group has conducted the monthly survey since 1994, using the same methodology as the national Institute for Supply Management. (Reporting by Karen Pierog; Editing by Neil Stempleman)