Indiana will experience rising wages along with low inflation and unemployment in 2008 as the economy improves from a sluggish 2007, two Ball State University economists predicted yesterday in the university’s annual forecast.
Michael Hicks, whose column about the economy appears in IBJ, and Gary Santoni said high oil prices and worries concerning the subprime market will affect how the economy actually plays out.
But they estimate the state will add 47,000 jobs. The 1.6-percent growth would be better than in recent years. The bulk of those new jobs likely will come in financial services and health care.
Wages will rise 3.8 percent and the unemployment rate will remain at about 4.6 percent, matching the national average.
Indiana’s inflation rate will fall to 2.6 percent from the 3.8-percent average of 1960 to 2006, they said.
Santoni and Hicks based the forecast on data from the U.S. Census Bureau and Columbia University’s Longitudinal Employer Database.
They are more optimistic than an outlook issued by Indiana University’s Kelley School of Business a month ago. IU said the state would gain only 15,000 jobs due to the drag of ongoing restructuring in the manufacturing sector.