The regional manufacturing economy remained strong last month even as job losses continued, according to Creighton University. .July’s Business Conditions Index dropped to 55.7 from 56.0 in June, which Creighton Economic Forecasting Group Director Ernie Goss said still signals an expanding manufacturing economy. The reading has now been higher than the growth-neutral score of 50 for six straight months. First quarter GDP increased 2.1 percent, higher than labor expansion as businesses invested in technology, Goss said. Consumer spending is still weak, especially among those with lower incomes, he added.The inflation rate is higher than wage growth, Goss said, with the related index still high but dropping to 71.4 from 78.3 in June. Headline annual PCE inflation increased 3.7 percent, Goss noted, much higher than the Federal Open Market Committee’s 2 percent target. Compensation costs for civilian workers increased at less than 1 percent in Q2. The vast majority of manufacturers said the war in Iran has not led to a change in orders. Sixty-four percent of manufacturers delayed shipments and increased costs, according to the report. Thirty-six percent saw no change. Goss described trade numbers as “moving sideways but negative,” with the imports index increasing to 44.8 from 44.1 in June and the index tracking exports falling to 46.1 from 47.3. Goss criticized the Trump administration for invoking Section 338 of the Tariff Act of 1930 for the first time, which levied a 50 percent additional tariff on $20 billion of targeted Canadian alcohol, dairy and motor vehicle-related imports. “He’s punishing our northern neighbor, Canada,” Goss said. “I disagree with that. That’s not good policy, at least from an economic standpoint.” The hiring trends index increased to 51.2 from 49.8 in June, only its second time in the past 12 months of being above 50. The United States has shed 37,000 manufacturing jobs in the past 12 months.
