Creighton economist says inflation is rampant, impacting Midwest economy
Creighton University economist Ernie Goss, who oversees the Rural Mainstreet survey
OMAHA — The latest survey of business leaders and supply managers in Iowa and eight other Midwestern states finds inflation driving up prices.
Creighton University economist Ernie Goss says consumers are having to pay more for a range of products, while hiring levels aren’t yet back to where they were before COVID-19 hit. “Regional employment is still down about 3.9% from pre-pandemic levels, while the U.S. number is down about 4.4%,” Goss says. “All nine states are reporting employment levels below pre-pandemic numbers, so we’re moving in the right direction.”
The regional economy’s overall performance numbers fell slightly during July, as did Iowa’s figures, though Goss says they’re still strong and show the economy is continuing to expand at a solid pace. Still, he says the inflationary figures are not what we want to see.
“Inflation is just rampant,” Goss says. “We’re seeing at the wholesale level, the number for the month of July was a record 98.7. That’s up from June’s record high of 98.4, so we’re seeing prices moving up, up, up.” As inflation surged, the confidence index dropped to its lowest level in five months. Business leaders in the nine states were asked how those higher prices due to inflation would be reflected in their company’s performance.
“Fifty-eight-point-six percent expect to pass these on to customers and 37.9% expect the higher prices will reduce profits,” Goss says, “and 3.5% expect it to reduce their wages.” On average, the survey found supply managers expect their companies’ prices to rise by another 7.7% over the next 12 months.
According to the U.S. Bureau of Labor Statistics, average hourly wages for manufacturing production workers in Iowa rose 7.9% over the past 12 months. Goss says that ranks Iowa number two among the nine Midwestern states.