June survey highlights:
- The Business Conditions Index expanded to a reading slightly above growth neutral.
- Job losses continued for June with an employment index well below growth neutral.
- In terms of hiring for the rest of 2020, 51% expect no changes, 17% anticipate bringing back furloughed workers, 26% expect to bring back furloughed workers and add new workers, and 6% predicted a continuation of layoffs.
- Regional trade numbers remain near record lows.
OMAHA, Neb. (July 1, 2020) – The June Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, advanced above growth neutral.Overall index: After falling below growth neutral for three straight months, the overall index bounced into positive territory for June. The Business Conditions Index, which ranges between 0 and 100, increased to 50.3 from May’s 43.5.
“While the June reading was much higher than I expected, it provides no grounds for celebration. June’s above growth neutral reading indicates that between May and June, business conditions improved. It will take many months of above 50.0 before the regional economy returns to pre-Covid-19 levels,“ said Ernie Goss, PhD, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business.Employment: The June employment index continued to indicate job losses, and at a faster pace than in May. The June index slumped to 38.9 from May’s 40.0, but was up from April’s record low of 26.2.
“According to U.S. Department of Labor data between the first week in May and the second week in June, the number of workers in the nine-state region receiving unemployment compensation declined from 1.3 million to 1.2 million,” said Goss.Said one supply manager, “In June we permanently laid off 40 workers who were already on furlough, while bringing back other workers off furlough. Compared to last month employment is up, but compared to pre-COVID, our employment is down.”Wholesale Prices: The wholesale inflation gauge for the month indicated an upturn in wholesale prices from May with a wholesale price index of 59.7, up from 48.6 for May.“Despite June’s reading, I expect to see little to no inflationary pressures at the wholesale level in the weeks and months ahead, even with the Federal Reserve’s, and the U.S. government’s massive economic stimulus programs,” said Goss.Other June comments from supply managers:...
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