From Creighton's Heider College of Business,September 1:
August survey highlights:
- The regional Business Conditions Index expanded to its highest level in two years.
- For the first time since January, the employment index rose above growth neutral.
- According to U.S. Bureau Labor Statistics data, the region has lost approximately one million jobs since the onset of COVID-19, for a 7.3% decline, of its non-farm jobs.
- Four of five manufacturers reported difficulty in finding and hiring qualified workers.
- Business confidence climbed to its highest level since February 2018.
OMAHA, Neb. (September 1, 2020) – The August 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, and to its highest level in two years.Overall index: After falling below growth neutral for three straight months, the overall index bounced into positive territory for June, July, and August. The Business Conditions Index, which ranges between 0 and 100, increased to 60.0 from July’s 57.4.“While the August reading was certainly encouraging, manufacturing activity in the region remains below pre-COVID-19 levels. Creighton’s regional index has been mirroring the national ISM index with reading above growth neutral for June and July. I expect the national number to be above growth neutral for August when it is released later this morning,” 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: For the first time since January of this year, the regional employment index moved above growth neutral. The August index climbed to 54.8, its highest level since July 2019, and up from last month’s July 48.5. Even though the insured unemployment rate for the region is approximately 4.5% higher than that immediately prior to COVID-19, four of five supply managers reported that their firms were experiencing difficulty finding and hiring qualified workers.Wholesale Prices: The wholesale inflation gauge for the month indicated a fall in wholesale prices from July with a wholesale price index of 52.3, down from 65.2 in July.“Recessionary economic conditions from COVID-19 are putting downward pressure on wholesale inflation. Importantly, low inflation has pushed the Federal Reserve to be more comfortable with current ultra-low short-term interest rates. In its latest meeting, the Fed rate setting committee, the FOMC, indicated it will likely keep short-term interest rates at near record lows well into the future even if inflation ticks up above their target,” said Goss....
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