Kokomo forecast 2023.

• Author: Chulkov, Dmitriy V.

This article, as part of an annual series of regional economic analysis, presents economic data and forecasts for the Kokomo metropolitan statistical area (MSA), which includes Howard County. The analysis also looks at the Indiana University Kokomo service region. (1) This region of north central Indiana centers around the city of Kokomo. Its western portion is closely connected to the Lafayette MSA, while the southern part closely follows the economy of the Indianapolis metropolitan area.

The regional economy relies on three main components: manufacturing, services and agriculture. Manufacturing represents a traditional strength of the region and accounts for a larger share of the economy as compared with both the Indiana and national averages--about 30% in the Kokomo MSA. Agriculture plays an important role outside of the large population centers.

Employment and unemployment

In 2021, the region recovered from the impact of the coronavirus pandemic, and the labor market was quite tight at the end of the year, heading into 2022. Unemployment rates reached historic lows close to 1% in several of the region's counties (see Figure 1). Throughout 2022, labor markets returned to normality. Many people who left the labor force at the height of the pandemic resumed their participation in the labor market. The labor force and both employment and unemployment numbers showed a steady increase in 2022. By August, most of the region was closer to its natural rate of employment and unemployment, with the unemployment rate around 3%.

Unemployment rate figures in the region generally move in a similar direction, reflecting commonality in the makeup of the economy. The outliers are Howard County with unemployment rates on the high side and Hamilton County on the low side. Hamilton County continues to have an extremely tight labor market. Howard County, including the city of Kokomo, exhibited significant variation in unemployment rates, ranging from 2.9% to 6.9% over the last year. In Howard County, the number of jobs actually exhibits much more stability than the unemployment rate figures display. However, the total labor force and unemployment numbers are volatile, indicating a high share of the county's residents are marginally attached to the labor force. Howard County also has a higher share of manufacturing jobs compared to the region and the state of Indiana, and so its employment figures are strongly influenced by any irregular activities within the manufacturing industry.

Figure 1: Regional unemployment rates by county Sep-21 Oct-21 Nov-21 Dec-21 Jan-22...