Indiana.

• Author: Conover, Jerry N.
• Position: Economic conditions - Statistical data

With the end of 2006 in sight, the year is shaping up to be one of even tamer growth than we predicted a year ago. As shown in Figure 1, Indiana's total nonfarm payroll employment in 2006 has continued its relatively steady climb that began in July 2003. As of September 2006, nonfarm payrolls accounted for 2,980,200 Indiana jobs. This level is barely I percent below the state's all-time employment peak reached in May 2000, and it's almost 100,000 jobs higher than the post-recession low of three years ago.

[FIGURE 1 OMITTED]

Employment

Employment growth began the year at a fairly slow pace of about 20,000 new jobs annually compared to a year earlier. Then the pace picked up to a year-over-year rate of about 25,000 to 30,000 new jobs during the summer, but it slowed substantially in September. This continues a trend of decelerating job growth over the past two years, but at least we're still adding jobs in most months.

Indiana's modest job growth has been shared across most industries. The sectors with the largest contributions to new jobs over the past twelve months have been education and health services (averaging 6,742 new jobs year-over-year); leisure and hospitality (4,718 jobs); trade, transportation, and utilities (3,742 jobs); professional and business services (3,017 jobs); and construction (2,917 jobs).

The traditional bastion of the Hoosier economy, manufacturing, averaged an annual growth rate of only 383 jobs over the past twelve months, and overall factory employment has not budged much for the past two years. Even with this slow growth, however, Indiana is still the nation's most manufacturing-intensive state with respect to employment, which accounted for 19.1 percent of all payroll jobs in September.

The overall pattern evident in Indiana employment this year is neither strongly encouraging nor discouraging. Most sectors are experiencing slow growth, with a bit more momentum evident in the trends for health care and education, professional and business services, and leisure and hospitality. The government, manufacturing, and information sectors' employment, meanwhile, remains relatively flat on average. Finally, there has been some recent acceleration in the financial activities sector that bears watching.

Indiana's unemployment rate in 2006 continued to meander in the general range of 5 percent, as it has for several years. However, the unemployment rate has declined over the last few months, and the number of people...