By NICK GOSNELL
HUTCHINSON, Kan. — The April Creighton University Mid-America Business Conditions Index, a survey of supply managers in nine states, including Kansas, was the highest in the nearly three decades of the survey at 73.9 as first reported on Monday.
"It's signaling growth is very rapid out there in the manufacturing sector," said economist Ernie Goss. "That's the good. The bad is it's pushing up inflationary pressures. We've got supply chain disruptions, we've got supply chain delays."
Getting good people is still a challenge, too.
"This has been a constant problem for this part of the country," Goss said. "However, we add to that the $300 a week add on to unemployment compensation. There are a number of unemployed workers, I would argue a high percentage of the unemployed workers getting unemployment compensation that are being paid more to remain unemployed than to get a job. There's a stiff incentive to remain unemployed for many of the unemployed workers. That's another factor that's slowing down growth, particularly for some of the leisure and hospitality."
The Federal Reserve doesn't look like it's going to do anything, at least right now.
"They're not going to raise interest rates in anticipation of higher inflation," said Goss. "They're going to wait and see and wait until they actually begin to see increasing indications that this is not transitory, but in fact is embedded into our prices for the long term and that's what we have to keep an eye on."
Goss wants people to watch the yield on the ten-year Treasury bond. If that yield rises above 2%, then the Fed may be forced to act.