dsmWealth: August 21, 2025

Economists warn of trouble ahead for Iowa's economy
BY STEVE DINNEN

The nation’s GDP grew at a respectable 3% in the second quarter of 2025. That was a good lift from the anemic 0.5% growth rate during the first quarter.

Iowa results are not yet available, but first-quarter numbers show the state is lagging behind the national average. Iowa’s other economic data is weak as well, showing the state has challenges.

In the first three months of 2025, the Bureau of Economic Analysis showed Iowa’s real Gross Domestic Product decreasing by 6.1%. That’s a massive decline. At a national level, that hasn’t occurred since the Great Depression. Another poor number for Iowa is average hourly earnings, reported by the Bureau of Labor Statistics. The latest calculation of $30.37 is the lowest among all of Iowa’s surrounding states and lower than any state outside of the Deep South and New Mexico.

Peter Orazem (pictured), who teaches economics at Iowa State University and directs its Program for the Study of Midwest Markets and Entrepreneurship, believes the GDP numbers spell bad news for Iowa.

“By national standards, Iowa is in a recession,” he said. In fact, he added, the state has been underperforming relative to the nation for the last seven years.

Weakness in the agriculture sector is a big factor for the relatively poor statistics. Agriculture and related industries account for around 20% of Iowa’s total economic output. Iowa is a leading producer of a number of agricultural products, notably corn, soybeans and hogs. With such outsized production, any dip in prices ripples through the whole state.

Ernie Goss, a professor of economics at Creighton University, estimated the break-even price of a bushel of corn at $4.80. The latest spot price of corn was $3.77. Multiply that $1.03 per-bushel shortfall times this year’s anticipated 2.63 billion bushels across the state, and you can envision trouble come harvest time.

Agriculture also affects Iowa manufacturing, with companies such as John Deere, Kinze Manufacturing and two tire plants in Des Moines devoting their entire output to farm equipment. Food processing, be it meat or dairy or pasta, likewise is tied to the farm.

But it’s not all gloomy. At some point, commodity prices will rise. Farmers are trying to lower input costs to await that day. Manufacturing will flow after it ebbs. Insurers are devising new products to gain market share. And, with any luck, employers will boost wages as workers increase their productivity.

So everyone has a hand in this. Everyone has a role in Iowa’s growth, now and in the future.

Back to school, or the movie theater, with Robert Reich
BY STEVE DINNEN

A lecture hall crammed with a thousand students doesn’t seem like a fun place to spend much time, in person or in a movie theater. And yet, a documentary called “The Last Class” makes it work. Maybe it’s due to the star power of Robert Reich — former U.S. Secretary of Labor, adviser to presidents, political commentator for decades — as he teaches his final "Wealth and Poverty" class at the University of California Berkeley.

This 71-minute film, which opens Aug. 29 at the Varsity Cinema, captures his last stand at the lectern and highlights a 40-year career that influenced 40,000 students.

Reich was born in Scranton, Pennsylvania, like Joe Biden, and was a classmate of Clarence Thomas, Bill Clinton and Hillary Clinton (whom he once dated). He’s always worked in and on the edges of government. He is a political economist, professor and prolific author. At the Labor Department, he referred to himself as "secretary of the American workforce" and "the central banker of the nation's greatest resource.” He was one of the most consequential secretaries to hold that post and bragged that he pushed through a boost in the federal minimum wage with a Republican Congress. He also implemented the Family Medical Leave Act and was a leading proponent of NAFTA.

Reich also taught at Brandeis, Harvard and, since 2006, at Berkeley. The new movie follows those teaching years, sprinkling in extra bits from his years inside the Beltway.

Americans pull back from an epic credit-card binge
BY IMANI MOISE AND DALVIN BROWN FOR THE WALL STREET JOURNAL

Americans are starting to pull back from a pandemic-era credit-card binge.

After a surge in credit-card spending that pushed Americans’ card balances above $1 trillion, growth is now moderating. Credit-card spending has been growing more slowly than debit-card spending since late last year, the first such stretch in nearly four years, according to the latest spending data from Visa and Mastercard.

Credit-card originations had soared during the recent period of high inflation. That allowed Americans to keep spending on discretionary items even after money ran out from pandemic stimulus payments.

More recently, household budgets have been under pressure on several fronts, from the resumption of student-loan payments to high credit-card interest rates. In that environment, some card companies are becoming pickier about whom they offer cards to, focusing on well-heeled customers. Consumers are growing more cautious about taking on new debt.

“We saw this meteoric rise in credit-card debt,” said Charlie Wise, senior vice president at TransUnion, a credit-reporting bureau. “We’re seeing consumers rein themselves in.”

Read the full article ... for extra credit.

Timing your retirement: A financial professionals's guide on when to say when
BY MARK MARRAZZO FOR KIPLINGER

People begin to ponder an important question as the dollar amount rises in their retirement account and the calendar tells them they are another year older:

Exactly when should they retire?

Is a particular age the right age? Someone approaching 67 who will be eligible for their full Social Security benefits might decide that's the moment.

Others might opt to retire a decade earlier because they want to be young enough to enjoy those retirement years.

A person who is still passionate about their career might keep working long past a traditional retirement age because of the sense of purpose the job gives them.

Just how do you decide?

No one answer works for everyone. But there are a few things to consider as you decide whether the timing is right for your retirement.

Read the full article for tips on choosing a retirement lifestyle, adding up income sources and planning for taxes.