Economic Trends 
August 2021 | Creighton Institute for Economic Inquiry  

Welcome to our August report covering results from Creighton’s two July economic surveys. 
Creighton’s monthly survey of supply managers and procurement experts in nine Mid-America states indicates economic growth is in a range indicating the regional economy is experiencing a very strong economic rebound with significantly elevated inflation. The overall index from Creighton’s monthly survey of bank CEOs in rural areas of 10 states declined to a still strong reading with expanding farmland prices and agriculture equipment sales. 
Creighton University
Jack MacAllister Chair in Regional Economics
From the Desk of Professor Ernie Goss
The Six-Month President: From Ford to Biden

White House press secretary Jen Psaki recently celebrated the Biden Administration’s first six months in office by extravagantly declaring that “……the president has acted to get America back on track by addressing the crises facing this nation.” Continuing, she modestly declared that he had “rebuilt the economy.” But how does Biden’s first six months actually compare to that of his 7 predecessors?
In the table below I rank each of the U.S. presidents beginning in 1975 to today according to growth in the overall economy, jobs and in inflation adjusted wages for the first 6 months of their presidency. Also, to gauge whether each president got “America bank on track,” I compare each’s growth rate to the last 6 months of their predecessor.

GDP growth estimates listed in Table 1 indicate President Carter experienced the top first 6 months with President Biden occupying a very close second. However, GDP growth under Biden suffered the largest negative turnaround with GDP declining by 5.6% between the last 6 months of Trump and the first 6 months of Biden.
Job growth estimates listed in Table 1 indicate that Biden experienced the top 6 month beginning with Carter capturing a close second. Additionally, Biden’s job growth was second only to Carter in terms of increases over the previous 6 months of the Trump by 0.59%.
Wage growth adjusted for inflation estimates listed in Table 1 show that Biden suffered the worst experience in the first six months among the 7 presidents with Trump experiencing the top average inflation adjusted wage expansion in the first 6 months of occupying the White House.  

Despite the fact the president lacks even modest control over national economic measures in the first six months, pundits and the media continue to gauge and compare the president’s effectiveness by economic metrics over which it is argued that he and his predecessors have had little control. On these measures, President Biden has clearly not “rebuilt the economy.”
Number of the Month


In July there were 1,398,000 more
job openings than unemployed workers (1.2 jobs for each unemployed worker). 
The U.S. worker shortage has become extreme as the federal government incentivizes joblessness with $300 enhanced jobless benefits, expanded healthcare subsidies, child care payments, child tax credits, food stamps, rental eviction moratorium, rental assistance, utility assistance, and others.
Goss Eggs 
Recent Dumb 
Economic Moves

After grinding the Supreme Court’s collective nose in the nation’s Constitution by prolonging the moratorium on rental evictions, the Biden Administration next extended the moratorium on student loan payments.
Secretary of Education, Miguel Cardona, argued that the extension was necessary to give borrowers time to plan a restart. Only 10% of the 43 million borrowers were making payments on their $1,100 billion debt accumulated while attending schools ranging from the most expensive graduate school to the most affordable technical school. 
Score: Four Goss Egg.

Wholesale Price Soar to Another Record High: Economic Outlook Plummets

July survey highlights:
  • Creighton’s regional Business Conditions Index climbed into a range indicating very strong growth for the next three to six months.  
  • Confidence index plummets to lowest level in five months.
  • The wholesale inflation gauge surged to another record high.
  • More than half of supply managers expect soaring input prices to be pushed off on to their customers.
  • Almost 38% of supply managers expect rocketing input prices to be absorbed by their company in the form of lower profits. 
  • On average, supply managers expect their companies’ prices to advance by another 7.7%, over the next 12 months.

Rural Mainstreet 
July Index Strengthens: Bankers Expect Farmland Price Growth to Fall by Half in Next 12 Months

July survey results at a glance:
  • Overall index remains at a high level indicating strong growth for the month. 
  • Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that the Rural Mainstreet nonfarm employment remains 1.3%, below its pre-COVID-19 level.
  • In three states, Minnesota, Nebraska, and South Dakota, current nonfarm employment exceeds pre-pandemic levels. 
  • On average bank CEO’s estimated farmland price growth for the previous 12 months at 5.8%, but project growth at only 2.4% for the next 12 months.
  • Almost half of bankers reported damaging drought conditions for farmers in their area.  
View the complete Rural Mainstreet Report.
The Outlook

Professor Goss' Forecast - August 2021:

  • While I expect solid wage growth for the rest of 2021, inflation adjusted wage growth will be close to zero due to soaring inflation. 
  • The Democrat $3.5 trillion reconciliation infrastructure bill (i.e. passed without Republican support) will be scaled back to obtain Senator Manchin’s support. Even so, it will add more disincentives to work and encourage many potential workers to remain out of the workforce.
  • The Fed will begin scaling back (e.g., tapering) its monthly purchases of MBS and U.S. Treasury bonds in the fourth quarter of 2021.

National Association of Business Economics. (July, 2021): SUMMARY:
  • ““The results of the July NABE Business Conditions Survey show that conditions remained strong during the second quarter of 2021,” said NABE President Manuel Balmaseda, CBE, chief economist, CEMEX. “Two-thirds of respondents report that sales at their firms increased in the second quarter of 2021, while only 3% indicate sales declined. In addition, most anticipate a strong trajectory for inflation-adjusted gross domestic product, or real GDP, through the spring of 2022. Eighty-six percent of respondents expect real GDP growth over the next year will equal 3% or more. A record-high share of respondents reports that profit margins increased at their firms in the second quarter of 2021,” added NABE Business Conditions Survey Chair Eugenio J. Aleman, chief economist, Energy Information Administration (EIA). “At the same time, materials costs rose at a majority of respondents’ firms. “Respondents continue to be optimistic about the near-term outlook for employment,” continued Aleman. “A third of respondents reported their firms had added workers in the second quarter, and an even higher share expects an increase in their workforce in the next three months.”
Work - Image
The Good

  • U.S. job openings surged to 10.1 million for the first time ever in June and exceeded the 9.5 million unemployed workers.
  • The nation added 943,000 jobs in July, the highest gain in the last 12 months.
  • The Case-Shiller home price index soared by 16.6% in May compared to 12 months earlier.
  • Continuing claims for unemployment insurance fell to below 3 million for the first time since March 14, 2020. 

Money Suicide
The Bad

  • The consumer price index rocketed 2.5% higher over the past two months.
  • Creighton’s wholesale inflation gauge from the July Mid-America manufacturing supply manager survey soared to another record high. 
  • The CBO projects that the federal budget deficit for fiscal 2021will be $3 trillion. That would be nearly triple the 2019 shortfall.
Keep An Eye On

  • U.S. Inflation Report. On September 14, the U.S. Bureau of Labor Statistics (BLS) releases its consumer price index (CPI) for August. Recent readings are signaling inflation well above the Federal Reserve’s acceptable level (transitory or not!)  
  • U.S. Jobs Report. On September 3, the BLS releases its job numbers for August. Another stronger than expected reading (above 700,000) will push the Federal Reserve to begin the taper of their quantitative easing program raising long-term interest rates.     
  • Case-Shiller Home Price Index. On August 31, S&P CoreLogic Case-Shiller will release its home price index for June. The housing bubble will continue to get bigger raising the possibility of a “bust.”  
Ernest Goss, Ph.D.