Once the dust, and dirt, of campaign exaggerations and rhetoric settled following Tuesday’s election, the release of benign statistics showed the economy in a more realistic light.
The American economy, and its future, look promising. Folks living in the Wabash Valley and other Indiana regions outside Indianapolis and its affluent rim counties may rightly disagree. Here, unemployment remains above rates in other Hoosier metros and the nation. Local wages and incomes remain below the state average, which in turn falls below the U.S. average. Still, reports issued last week revealed strength in America’s labor market, consumer confidence and business expectations, a sharp contrast to fears that dominated election ads.
Economists from the Indiana University Kelley School of Business gathered in Indianapolis to discuss their annual Business Outlook forecast over breakfast in the Columbia Club on Monument Circle. In the traditionally conservative forum, the economists cited “clear signs” of national growth from a stable housing market, rising consumer spending, and the strengthening job market. The experts also predicted the trends will continue.
Veteran forecaster and Kelley professor Bill Witte cautioned, “This favorable outcome is far from a sure bet. The level of uncertainty in the current environment remains high.” One huge question mark centers on the ability of Congress — of which Republicans gained control over in Tuesday’s voting — to end its gridlock and function alongside Democratic President Obama. Indeed, such reconciliation will be difficult in a relationship marked by obstruction (by Congress) and circumvention (by the White House). Both sides would need to start respecting the other and, most importantly, the people they represent. Let’s hope they do.
The business economists in Indy predicted the state jobless rate could fall to levels unseen in a decade. And, one day later, the U.S. Labor Department released statistics showing the U.S. unemployment rate dropped even though more Americans entered the labor force. Another 214,000 jobs were added by employers last month, marking the ninth consecutive month of 200,000 or more new jobs; that hasn’t happened since 1994, according to Reuters.
Both the national report and the Indianapolis forecast explained the exceptions to the good news. The hourly earnings by American workers increased a mere 3 cents in September. On its own, that meager rise fits in with a long stretch of wage stagnation. But economists told Reuters that the small uptick, coupled with the more robust news in other sectors, could signal better wages ahead.
The flat income problem is more entrenched in Indiana. As CNHI columnist Maureen Hayden reported from the Kelley forecast breakfast, Hoosier per capita incomes rank 38th in the U.S. The gap between the rich and the poor widens in regions outside of Indianapolis, economist Kyle Anderson explained.
The picture painted in the economic news last week proved clearer than gloom-and-doom campaign rants. There is progress, potential and problems, and our government leaders should react according to reality.