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State's economy still stuck in neutral

IBJ Staff
December 24, 2011
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Treading water. Spinning its wheels. Stuck in a rut.

There are many glib phrases for the economy in 2011, and they are all apt.

The year started with a sense that slowly—not fast enough for anyone’s liking—but steadily, Indiana’s economy was coming back. But then a spike in gas prices and the never-ending sovereign debt crisis in Europe created a summer of setbacks.

Employment in Indiana actually peaked in July 2010, on a seasonally adjusted basis, and has never quite reached that same level since. The state had 2.79 million workers in October 2011, the most recent data available. It had exactly the same number a year ago.

Average weekly wages for private workers trended down most of the year until spiking in October to a new high of $744.50. Could that augur better days to come?

Yes and no, says Ball State University economist Michael Hicks. Productivity gains have slowed way down, which suggests businesses will have to do more hiring if they want to keep expanding. But any improvements in overall economic vitality will be gradual, not dramatic.

“Unfortunately, I’m predicting next year as a redux of this year,” Hicks said.

Things are certainly brighter in Kokomo, where a resurgent Chrysler Group LLC is keeping its factories humming and even paying overtime to its 3,500 workers there.

Manufacturing in general has steadily improved this year. The sector still employs far fewer people than it did when the recession began in December 2007. But manufacturers added 6,000 jobs this year, and hours worked and wages paid were trending up in October.

Also, temporary hiring has been rising since the summer, which usually signals that companies are bringing on new workers, hoping to convert them to full-time hires later on.

But there could be shocks, particularly if heavily indebted Greece or, even worse, Italy, defaults on its bonds. That could create a European banking crisis that, if not disastrous for the United States, certainly wouldn’t be helpful.

In the Indianapolis area, the number of jobs grew during the first quarter, then plunged, hitting lows not seen since 2003. In October, the metro area had 865,500 workers—about 3,700 fewer than it had at the end of 2010.•

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  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

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