Is low unemployment slowing growth?

• Position: Indiana economy

The Indiana economy is operating at a rate that is close to capacity, judging from the low unemployment rates enjoyed in most parts of the state. The trend raises warning flags about the capacity for future growth.

The state's employment total for the second quarter of 1997 was just 0.9 percent above its level for the same period in 1996, and it marks the sixth consecutive quarter that state job growth has fallen short of growth nationwide.

The usual explanation for a slowdown in the Indiana economy is a falloff in the nationwide demand for durable goods. But production of electrical machinery is up 10.0 percent over a year ago, and production of non-electrical machinery is up 10.8 percent.

Has the state's low jobless rate - which translates into higher...