By BILL MEDLEY, Evansville Courier & Press staff writer

Higher energy prices, slow income growth and uneven employment conditions are among the factors posing a financial challenge for Hoosier households, according to a federal report released Tuesday.

The Federal Deposit Insurance Corp., which is responsible for insuring bank deposits, released profiles this week on economic conditions in each state. According to the FDIC's report for Indiana, many Hoosier families are feeling an economic pinch.

"Signs of financial strain remain evident for many Indiana households," the report states.

"A combination of relatively slow population growth, steady housing starts, uneven employment conditions and slow income growth ... produced conditions for added financial stress for many Indianans," the FDIC said.

The FDIC said energy prices this winter are also causing problems for much of the Midwest. The report notes a Vectren Corp. projection that natural gas bills this winter could rise as high as 55 percent in Indiana compared to last year. The cost increase here could be even higher.

"Vectren's southern Indiana customers may see their gas prices rise more because they receive much of their gas from pipelines in the Gulf of Mexico, some of which have experienced operational difficulties," the FDIC said.

Homes in Indiana are also appreciating at a slower rate - 5 percent in a year's time - than the national average appreciation rate of 12 percent, the FDIC said. The lower appreciation rate limits the home equity Hoosiers can tap compared to the rest of the nation.

The report also notes that "housing affordability could decline should personal income continue to grow slower than home values."

Indiana's bankruptcy rate continued to lead the nation. In the third quarter of 2005, there were 13.5 bankruptcies per 1,000 people, compared to a national rate of 7.2 per 1,000 people, according to the FDIC.

The economic picture was a bit better for households in Kentucky and Illinois.

In Kentucky, the FDIC noted a strengthening labor market, which helped personal income to grow in the third quarter.

But, Kentucky also faces higher energy prices, even though the state's residential electricity costs are among the lowest in the nation, according to the FDIC.

Illinois households also benefited from expanded employment opportunities and an active housing market, the FDIC said. Bankruptcy filings in the third quarter were up slightly, an indication that many people rushed to the courthouse to file for bankruptcy before new regulations went into effect.

Higher winter heating bills are expected to have a significant effect on Illinois households because the state faces colder winter conditions than much of the country, according to the FDIC's report.

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