94 years of economic insights for Indiana

The IBR is a publication of the Indiana Business Research Center at IU's Kelley School of Business

Anderson forecast 2019

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Dean, Falls School of Business, Anderson University

Overview

The job market is “hot” in Madison County: After persistent unemployment and a decades-old decline in the number of jobs, the economic outlook has improved in Madison County. Since 2010, Madison County has experienced an eight-year decline in the unemployment rate and a strong increase in the number of jobs. In addition, since 2010, Madison County has significantly narrowed the unemployment rate “gap” with the state of Indiana.

Jobs and the unemployment rate since 2010

Nearly a decade of job increases: After long periods of stagnate and declining employment, the number employed in Madison County showed healthy increases for the last eight years. The increase has been particularly strong over the last five years. Between 2013 and 2018, the number of employed increased from 52,653 to 58,188 as of September 2018 (see Table 1). This represents an increase of 10.5 percent for Madison County and an increase of 11.5 percent for Indiana over the last five years.

Nearly a decade of falling unemployment rates: As of September 2018, the unemployment rate for Madison County has fallen to nearly a fourth of what it was in 2010. As shown in Table 1, the unemployment rate declined from a high of 12.1 percent in 2010 down to 3.3 percent as of September 2018.

Table 1: Annual average employment and unemployment rates

Year Madison County Indiana
Employment Unemployment rate Employment Unemployment rate
2010 52,243 12.1% 2,845,608 10.4%
2011 52,409 10.9% 2,891,945 9.1%
2012 52,201 10.0% 2,905,549 8.3%
2013 52,653 9.3% 2,944,275 7.7%
2014 53,773 7.1% 3,032,693 6.0%
2015 54,917 5.7% 3,109,362 4.8%
2016 55,968 5.0% 3,180,104 4.4%
2017 56,567 3.9% 3,203,351 3.5%
2018* 58,188 3.3% 3,284,163 3.0%

* 2018 data are as of September.
Note: Data are not seasonally adjusted.
Source: U.S. Bureau of Labor Statistics

Jobs and the unemployment rate over the last year

More jobs during 2018: As indicated in Table 1, the improvement in employment numbers for Madison County was ahead of Indiana over the year from 2017 to September 2018. Over the last year, Madison County employment increased from 56,567 to 58,188, or 2.9 percent. This increase is stronger than the good numbers for the state of Indiana where employment increased by 2.5 percent. The improvement for Madison County and Indiana are also evident over the last 12 months (see Table 2). Madison County improved the number of jobs by nearly 3 percent between October 2017 and September 2018, while the state of Indiana improved by just over 2 percent.

Table 2: Monthly employment and unemployment rates

Date Madison County Indiana
Employment Unemployment rate Employment Unemployment rate
October 2017 56,514 3.4% 3,212,128 3.1%
November 2017 56,629 3.4% 3,204,904 3.2%
December 2017 56,189 3.4% 3,179,912 3.1%
January 2018 55,961 4.2% 3,151,885 3.6%
February 2018 56,658 4.3% 3,200,157 3.7%
March 2018 57,454 3.8% 3,240,500 3.3%
April 2018 57,928 3.4% 3,272,816 2.9%
May 2018 58,534 3.5% 3,295,286 3.2%
June 2018 58,795 4.0% 3,307,135 3.6%
July 2018 59,330 3.8% 3,424,586 3.5%
August 2018 58,582 4.0% 3,282,413 3.7%
September 2018 58,188 3.3% 3,284,163 3.0%

Note: Data are not seasonally adjusted.
Source: U.S. Bureau of Labor Statistics

Unemployment rate falls during 2018: The unemployment rate for Madison County continued to drop in 2018 from 3.9 percent in 2017 to 3.3 percent as of September 2018 (as indicated previously in Table 1). This change represents a 15 percent improvement in one year for Madison County, while Indiana’s unemployment rate improved by 14 percent over the same period. The last 12 months support that trend. As illustrated in Table 2, over the last 12 months, the Madison County unemployment rate fell from 3.4 percent in October 2017 to 3.3 percent as of September 2018.

Closing the gap

Unemployment rate: Madison County has been closing the unemployment gap with the state of Indiana. For decades, the Madison County unemployment rate has trailed the state unemployment rate. However, since 2010, the gap between the Madison County unemployment rate and the unemployment rate for Indiana has narrowed considerably and now shows significant signs of closing. As shown in Figure 1, from 2010 to September 2018, the unemployment gap has narrowed from nearly 2 percentage points in 2010 to just 0.3 points.

Figure 1: Comparing Indiana and Madison County annual unemployment rates

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* 2018 data are as of September.
Note: Data are not seasonally adjusted.
Source: U.S. Bureau of Labor Statistics

Stronger jobs growth rate: Over the last several years, both Madison County and Indiana delivered more jobs. As of September 2018, the number of employed in Madison County hit just over 58,000 as shown in Table 3. The job growth rate for Madison County was right at 2.9 percent over 2017. This compares favorably to Indiana’s 2.5 percent job growth rate over the same time period.

Table 3: Madison County and Indiana employment and population comparison

Year Madison County Indiana
Employment Population Employment Population
2010 52,243 131,637 2,845,608 6,490,590
2011 52,409 131,018 2,891,945 6,516,845
2012 52,201 130,259 2,905,549 6,538,283
2013 52,653 130,401 2,944,275 6,570,518
2014 53,773 129,999 3,032,693 6,597,880
2015 54,917 129,723 3,109,362 6,619,680
2016 55,968 129,452 3,180,104 6,637,441
2017 56,567 129,498 3,203,351 6,666,818
2018* 58,188  129,500 3,284,163  6,700,000

* Employment data for 2018 are as of September 2018, and 2018 population data are estimated.
Note: Data are not seasonally adjusted.
Source: U.S. Census Bureau and U.S. Bureau of Labor Statistics

Falling population: A higher number of jobs in Madison County was accomplished during a time of falling population. As illustrated in Table 3, the number of jobs increased in Madison County while simultaneously the population of Madison County declined over that same period. Since 2010, the number of employed in Madison County rose by 10.5 percent, while the population fell by almost 2 percent.

Outlook for 2019

For 2019, the overall forecast for jobs and the unemployment rate for the Madison County region is expected to continue its positive trend. The improvement comes primarily from three sources: an overall growing economy, the recent influx of new businesses and the growth of existing businesses.

Unemployment rate: The unemployment rate for 2019 is projected to range from no change to a drop of another 0.3 percentage points or so as the regional economy continues to be strong. The improving jobs number will likely draw a number of previously frustrated unemployed people back into the labor force. An improvement in wages could also be a factor that would attract and draw in additional people into the labor force. As a result, the best estimate is an unemployment rate for Madison County of about 3.1 percent for 2019.

Jobs: The number of jobs in Madison County is expected to increase in 2019 between 1-2 percent. Given the strength of the labor market, this expectation reflects only a moderate increase in employment. Therefore, it is forecasted that the number of jobs in Madison County will increase by about 1.5 percent in 2019 with the number of jobs likely to hit just over 59,000.

The gap: It is expected that Madison County will continue to narrow the unemployment rate gap with Indiana in 2019. For the first time in decades, the strength of the 2019 Madison County labor market could push the unemployment rate to match or be better than the unemployment rate for the state of Indiana.