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Midwest businesses see July boost, but manufacturing job losses continued
While a monthly survey of supply managers in the Midwest and the nation found business conditions improving, manufacturing job losses continued, although at a slower pace.
The July Creighton University Mid-America Business Conditions Index expanded to 57.4, from June's 50.3. The July reading was the highest since March 2019.
Readings above 50 suggest economic expansion.
'While the June and July readings were much higher than I expected, they provide no grounds for celebration,” said Ernie Goss, director of Creighton's Economic Forecasting Group, in a news release.
'It will take many more months of above 50 readings before the regional economy returns to pre-COVID-19 levels.”
Iowa's Business Conditions Index inched up to 50.9 in July, from 47.1 in June. Components of the overall July index were new orders at 66.4 for production. or sales at 57.9, delivery lead time at 64.4, employment at 29.0, and inventories at 37.0.
The July overall employment index continued to indicate job losses, but at a slower pace than in June.
The July index rose to 48.5 from June's 38.9.
Fifty-five percent - compared to 49 percent in April - reported cuts in hiring due to COVID-19.”
U.S. Department of Labor data show that between February and June, the nine-state region that includes Iowa lost 64,500 manufacturing jobs and a total of 888,000 nonfarm jobs.
'Bureau of Labor Statistics data show that since the onset of COVID-19, Iowa has lost 108,000 jobs, or approximately 6.8 percent of its total employment, and 5,400, or about 2.4 percent of its manufacturing employment,” Goss said.
'Our surveys point to continued job losses in the months ahead.”
Looking ahead six months, economic optimism, as captured by the MidAmerica Business Confidence Index, climbed to a strong 68.3, its highest level since April 2018 and up from 65.3 in June.
'The federal stimulus plan, the Federal Reserve monetary incentive programs and firm U.S. stock markets boosted confidence from June's already solid reading,” Goss said.
On a national level, however, U.S. manufacturing expanded in July at the fastest pace since March 2019 as more factories boosted production in the face of firmer orders and lean inventories, according to the Institute for Supply Management.
Its its nationwide manufacturing gauge increased to 54.2 last month, from 52.6.
Bloomberg News contributed to this report.