Iowa’s economy made healthy gains during December and mirrored strong growth for the nine-state Midwest region, according to a monthly survey from Creighton University.
Despite climbing manufacturing numbers, Creighton economist Ernie Goss says supply chain delays worsened during the last month of the year, and the picture for the months ahead isn’t very bright.
“Approximately one out of three supply managers expect supply chain bottlenecks to get worse in the first half of 2022,” Goss says, “and more than half of the supply managers reported that the Omicron variant was slowing deliveries, so that’s another concern out there.”
The Midwest’s GDP, or gross domestic product, rose during December, although hiring numbers fell during what’s typically one of the strongest months of the year for jobs. “Regional employment is still down about 2.6% from pre-COVID-19 levels,” Goss says. “The U.S. employment is likewise down by about 2.6% from pre-pandemic levels and all nine states are recording employment levels below pre-pandemic levels.”
In the latest figures from Iowa Workforce Development, the state’s unemployment rate fell during November to three-point-seven percent from three-point-nine percent in October. The Creighton survey’s wholesale inflation gauge for December dropped, but Goss says inflation in Iowa and the region remains at its highest levels in more than a quarter of a century of conducting the survey.
Looking forward, Goss says several key challenges are emerging. “Economic growth will slow with employment gains slowing for the first quarter,” Goss says. “Short-term interest rates will begin rising and pretty quickly, I think. Supply chain bottlenecks and labor shortages and inflation will be the chief economic impediments in the first half of 2022.”
Since the start of the pandemic, Goss says Iowa’s average hourly wages advanced by only eight-tenths of one percent.