Louisville forecast 2012.

• Author: Dufrene, Uric

At the start of 2011, the Louisville metro was on track for positive job growth. From January to April, the region added about 11,000 non-farm jobs, and the region's unemployment rate had declined by half of a percentage point. The start of the year's second quarter, however, was the beginning of an overall slowdown. From May to August, non-farm payrolls added no new jobs, and the unemployment rate only declined by three-tenths of a point. Since August, employment growth has resumed, and the region should continue to see gradual growth through 2012.

Employment

The Louisville metro continues to be down approximately 22,000 non-farm payroll jobs since the beginning of the Great Recession. Stronger manufacturing growth over 2011 helped partially erase the recession jobs deficit, but this growth is now beginning to slow (see Figure 1). Consequently, the region will continue to see positive job growth, but only at a slow rate.

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Unemployment Rate

The Louisville metro's unemployment rate appears to have reached a floor. After declines earlier in the year, the region's unemployment rate settled around the 9 percent level (see Figure 2). As employment and the labor force continue to grow, the unemployment rate will not see significant declines from the 9 percent level since both the labor force and employment will grow at approximately the same rate. The most recent data point saw the unemployment rate increase back up to 9.6 percent. However, the underlying trend in job creation was quite positive.

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On the other hand, the Southern Indiana metro counties (Clark, Floyd, Harrison and Washington) have enjoyed rates less than the region's average, with some counties experiencing unemployment rates around the 7 percent level. A favorable combination of growing employment and labor force is contributing to the overall rate decline. Hence, the outlook for Southern Indiana's unemployment rate is continued gradual improvement, with the area's rate settling to a level just above 6 percent.

Unemployment Claims

Southern Indiana's new claims for unemployment continue to show improvement from the escalating levels of 2009 (see Figure 3). The latest readings indicate that claims in the metro counties appear to have settled with no noticeable trend of higher or lower levels.

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Manufacturing

Manufacturing contributed to massive employment losses for Indiana during the Great Recession and subsequently contributed...