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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.•