South Bend and Elkhart forecast 2020.

Author:Zhuang, Hong

After eight years of expansion, it seems that the regional economy slowed down in 2019. The South Bend-Mishawaka Metropolitan Statistical Area (MSA) may likely see a modest increase in its aggregate production in 2019 and has experienced a smaller increase in the labor force and employment than in 2018. (1) Elkhart-Goshen's economic growth was subdued in the first eight months of 2019, accompanied by a rising unemployment rate.

Labor force and employment

The monthly trends of the labor force and employment are presented in Figure 1. (2)The labor force in the combined regions averaged 280,533 between January and August 2019, an increase of 3,004 workers from January-August 2018. Broken down by MSAs, the statistics show that South Bend-Mishawaka added 2,064 workers and Elkhart-Goshen added 940 workers to their labor forces, respectively. Although the labor force of the combined regions still expanded in 2019, its increment is only half that of 2018, indicating slower growth in the region. Furthermore, South Bend-Mishawaka outpaced its neighbor area in the labor force growth rate for the first time since 2010 when the economic recovery began. Meanwhile, this is also the smallest gain of the labor force in Elkhart-Goshen in the past eight years.

Employment in the combined regions averaged 270,515 for the first eight months of 2019, a modest increase of 1,947 workers from 2018. The increment of employment was 1,733 workers (+1.1 percent) in South Bend-Mishawaka and 214 workers (+0.2 percent) in Elkhart-Goshen. For Elkhart-Goshen, this is the smallest job gain since 2012. South Bend-Mishawaka also saw the smallest job gains in recent years. The employment growth rate of South Bend-Mishawaka outpaced that of the U.S. (1.0 percent) and Indiana (0.6 percent); whereas, Elkhart-Goshen fell below the national and state rates on this measure.


Figure 2 displays the unemployment rates in the Elkhart-Goshen and South Bend-Mishawaka MSAs from January 1990 to August 2019. The average monthly unemployment rate of South Bend-Mishawaka was 3.9 percent for year-to-date 2019, little changed from the average rate of 3.7 percent in 2018 because the labor force and employment increased at about the same pace. However, the unemployment rate in Elkhart-Goshen increased due to labor force expansion outpacing employment. The average monthly unemployment rate rose by 0.6 percentage points to 3.1 percent during the first eight months of 2019. This is the first time either area has seen an increase of the average unemployment rate in the most recent nine years. (3)

Nevertheless, Elkhart-Goshen's jobless rate is still...

To continue reading