The latest monthly survey of business leaders in Iowa and eight other Midwestern states finds Iowa’s economy is continuing to strengthen along with the region’s economy.
Creighton University economist Ernie Goss says the overall numbers are the best since February of 2015. The business conditions index for January jumped to its highest level in six years and the employment index also bounced.
“We’re seeing some job additions in the manufacturing sector,” Goss says. “Almost one-third of the businesses reported that finding and hiring qualified workers was an issue and that still remains an issue.” The survey shows the region added manufacturing jobs at the swiftest pace since August of 2014.
Iowa’s durable goods manufacturers, including metal producers and agriculture equipment makers, continue to “shed jobs,” Goss says, while nondurable goods producers are adding jobs, but at a slow pace. Goss sees one thing in the survey that’s particularly worrisome, a boost in inflation levels. Inflation is where prices rise and the purchasing value of money falls.
“Our inflation gauge was up to 74.2, up from 70.4 and its highest since April of 2014,” Goss says. “Inflation at the wholesale level is ticking upward. That is problematic because the Fed will begin raising rates.”
Goss says the Federal Reserve could start trying to stave off inflation by raising interest rates during this first quarter of the year, the first of several predicted rate hikes for 2017.