Job losses continued across the Midwest in August against flat business reports, according to the results of a nine-state business survey released Tuesday by Creighton University.

The university's Business Conditions Index rates anything above 50 as growth and below 50 as contraction. The index showed a tepid 51.4 in August, down from 51.5 in July but above June's figure of 50.5.

In Minnesota the business growth index slid below neutral for the fifth time this year. Survey results from local supply managers saw conditions decline from 50.3 in July to 44.6 in August as orders, production, inventories and food processing employment remained weak.

"The regional economy has begun to mirror the national economy with weak, but positive, output growth and job losses.

While the inflation gauge was down for the month, it is still telegraphing excessive inflation in the pipeline," said survey author Ernie Goss, a Creighton economics professor.

On the national front, exports continued to do well despite a recent upturn in the value of the U.S. dollar, but it wasn't enough to push the sector forward overall. The Institute for Supply Management reported Tuesday that the nation's manufacturing sector failed to grow in August. The production manufacturing index fell slightly from 50 in July to 49.9 in August.

In the Midwest, the August employment index grew but remained weak at 47.5. That's up slightly from July's 41.4.

Minnesota's employment index grew 0.2 percent but was still struggling at 42.6. Officials found Minnesota employment particularly weak in food processing and nondurable goods.

The Creighton survey includes Minnesota, Iowa, Nebraska, North Dakota, South Dakota, Kansas, Missouri, Oklahoma and Arkansas. "Due to solid productivity growth, firms have increased output with fewer and fewer workers. I expect unemployment rates to continue to rise for the overall region, but with significant variation across the nine states," Goss said.

The survey found that inflation continued to hamper producers and supply managers. While the August cost index of raw materials and supplies dropped from July's record high of 93.9 to 86.7, plant managers said prices paid remained "significantly above acceptable levels."

If inflationary pressures and a weak labor market continue as expected, the Federal Reserve probably won't cut interest rates when it meets Sept. 16, Goss and other economists said.

Dee DePass • 612-673-7725