Economic conditions are improving in Iowa and across the Midwest, according to the latest Creighton University survey of supply managers here and in eight other states.
Creighton economics professor Ernie Goss says the region has had five straight months with a rising employment index, while the region’s manufacturing sector saw a boost in job growth by 86-hundred jobs in the past year.
“Economic performance in the region and in the nation are moving along pretty briskly,” Goss says. “Three-point-four percent, that’s the national GDP number for the third quarter. Fourth quarter I think is going to be a bit below that. That doesn’t sound like brisk, but it is one of the highest readings we’ve had in some time. That’s going to spill over into retail sales for the upcoming holiday season.”
Goss says Iowa and three other states — Nebraska, Oklahoma and South Dakota — all lost manufacturing jobs over the past 12 months, while the remaining five states in the survey more than offset the losses. The October survey shows the employment picture is in something of a holding pattern.
“We’re seeing not much firing or laying off or even quitting, but we’re not seeing much hiring. Everybody’s sitting back and taking a wait-and-see approach to AI, artificial intelligence,” Goss says. “Right now, companies are saying, well, should we really hire as opposed to back in the pandemic when they thought we better hire, and this time they’re saying, no, maybe we shouldn’t hire.”
The survey uses a zero-to-100 scale where 50 is considered “growth neutral.” Goss says Iowa’s overall score rose to nearly 57 in October, up from just over 54 in September. One of the world’s largest AI companies will be going public soon, which Goss says is already causing ripple effects.
“The bond market’s getting crowded out there,” Goss says. “Anthropic will be announcing an IPO, initial public offering, in the weeks and months ahead. That’s also putting upward pressure in the bond market, meaning, rates will tend to rise a bit. So that’s really an issue going forward.”
AAA says gasoline prices are still averaging $4 a gallon in Iowa, about 16 cents below the national average. That average pump price in Iowa is almost a dollar and a quarter higher than a year ago.
“A lot of folks are wondering why are oil prices not coming down? They’re above $100 a barrel,” Goss says. “One of the reasons is, even though oil is getting through the Strait of Hormuz, we’re still getting, we’re still rebuilding our strategic reserves globally, and until those strategic reserves are refilled, we’re going to still see higher oil prices.”
According to data from the U.S. Bureau of Labor Statistics, Goss says the Iowa manufacturing economy shed 700 jobs over the past 12 months.
