Fort Wayne forecast 2024

Rachel Blakeman, J.D.

Director of the Community Research Institute, Purdue University Fort Wayne

Heather L.R. Tierney, Ph.D.

Associate Professor of Economics, Purdue University Fort Wayne

As the pandemic’s effects get smaller in the economic rearview mirror, it still feels like unprecedented times for the Fort Wayne economy heading into 2024, as mortgage rates mark 8%, inflation exceeds the 2% long-run average target and the job market still favors workers.

Despite remarkable resilience over the past three-and-a-half years, key indicators are starting to show a softening economy. For example, the Fort Wayne metro area’s unemployment rate was 3.1% (not seasonally adjusted) in September 2023 compared to 2.2% a year earlier, with almost 2,000 additional unemployed workers since September 2022, according to the Indiana Department of Workforce Development.¹ While the increase may look unsettling after many years of the unemployment rate being below the 5% “full-employment” mark, there are more job openings in the Fort Wayne area than available workers to fill them.

Fort Wayne, like the rest of the nation, is part of a significant demographic shift as Baby Boomers start aging out of the workforce. The oldest Baby Boomers – born in 1946 – turn 78 in 2024. Despite talk of “working ‘til they die,” the data do not indicate this is true. In 2022, 5% of Allen County residents ages 75 and older were working or looking for paid employment, according to U.S. Census Bureau data, as compared to 7.3% nationally and 7.1% statewide.²

Our unemployment rate model, as explained in more detail later, looks to have the Fort Wayne metro area remain at full employment throughout 2024.

Economic shifts

To better understand economic shifts over time, we looked at the numbers from the U.S. Census Bureau’s County Business Patterns (CBP) data. CBP provides industry-level data at the county and zip code levels, measuring the number of establishments, employment during the week of March 12, first quarter payroll and annual payroll. Establishments can be considered business locations.

For example, if a grocery store chain has three stores in the respective geography, that would constitute three establishments. It does not distinguish between ownership interests, so 12 grocery establishments could have somewhere between one and 12 owners. Excluded information are the self-employed, railroad employees, agricultural production employees and most government employees. Businesses without an Employer Identification Number (EIN) are excluded.

For this exercise, we looked at the number of establishments (see Table 1) and workers by industry (see Table 2) in Allen County for 2012, 2019 and 2021, which is the most recent year available.

Insights from the CBP data for Allen County:

• Health care and social assistance, with many social service non-profit organizations such as food banks and child care providers, was the largest industry as measured by number of employees in 2021 (36,022).

• Retail trade had the most establishments in 2021 (1,228).

• Information, which includes newspapers and other media outlets, lost the most employees (-992) while health care and social assistance experienced the largest numeric gain (+7,372) between 2012 and 2021.

• Health care and social assistance had the largest increase in number of establishments (+166) while wholesale trade had the largest numeric loss of establishments (-68) between 2012 and 2021.

• Mining, quarrying and oil and gas extraction had the largest percentage gain of employees (+100%) while information had the largest percentage loss in employees (-30.3%) between 2012 and 2021.

• Other than industries not classified, real estate and rental and leasing had the largest establishment gain as measured by percent increase (+34.5%) while mining, quarrying and oil and gas extraction had the largest percentage loss of establishments (-16.7%) between 2012 and 2021.

In total, Allen County had 9,051 establishments in 2012, 9,318 in 2019 and 9,432 in 2021, representing an increase of 4.2% in about a decade. As for employees, Allen County had 158,771 in 2012, 185,463 in 2019 and 178,760 in 2021, which was a 12.6% bump in total employees from 2012 to 2021, but a 3.6% drop between 2019 and 2021. That dip was not unexpected due to anticipated retirements, as noted above with the aging workforce.

Looking at industry-level data, health care and social assistance workers constituted 18% to 20.2% of the CBP workforce in the years evaluated. Retail trade establishments dropped from 1,288 in 2012 – 14.2% of Allen County establishments – to 1,228 in 2021, constituting 13% of establishments almost a decade later.

Industries that gained more than 1,000 employees from 2012 to 2021 were health care and social assistance (+7,372), construction (+4,016), retail trade (+3,416), transportation and warehousing (+2,504), manufacturing (+1,406) and professional, scientific and technical services (+1,188).

Between 2012 and 2021, the following industries added more than 50 additional establishments: health care and social assistance (+166), real estate and rental and leasing (+129), construction (+117), accommodation and food services (+73) and transportation and warehousing (+65).

Shifting to compare pre-pandemic data (2019) to about a year into the public health event (2021), the following industries lost more than 100 employees or more than 10 establishments: retail trade (-43 establishments), wholesale trade (-14 establishments and -631 employees), accommodation and food services (-2,053 employees), health care and social assistance (-1,337 employees), manufacturing (-1,124 employees), other services (-1,048 employees), administrative and support and waste management and remediation services (-1,043 employees), arts, entertainment and recreation (-708 employees), information (-584 employees), management of companies and enterprises (-238 employees), educational services (-139 employees) and real estate and rental and leasing (-134 employees).

Some of these pandemic-era losses would be expected since 2021 was measured when vaccines were just becoming widely available and many people were still limiting activities, making fewer employees necessary at movie theaters or restaurants. Others are more difficult to directly connect to pandemic effects, such as wholesale trade.

Fort Wayne consumption patterns

In short, Fort Wayne’s economy, and specifically the local labor market, is deeply tied to the spending patterns of Americans as a whole, which is reflected in the CBP data. Consumer spending drives the American economy, and Fort Wayne is not immune to those effects, positive or negative, with its reliance on manufacturing, not to mention services that support a community such as restaurants, accounting firms or landscapers.

After much of 2023 was spent speculating on whether the Federal Reserve could achieve a “soft landing” after raising the federal funds rate four times between February and September, the American economy demonstrated remarkable resilience, largely based on the endurance of the job market paired with strong consumer spending against “sticky” inflation.

Fort Wayne’s consumers seem to be continuing with similar trends heading into 2024, although higher prices on necessities coupled with higher interest rates, the restart of student loan payments and other economic pressures might curb household expenditures, especially if local wages don’t continue an upward trend. How much effect, if any, that has on Fort Wayne’s economy remains to be seen. Much has been predicted about a slowdown since widespread inflation took hold more than 18 months ago, but it’s not reflected in economic data yet.

Fort Wayne labor market outlook

Typically, one would expect a trade-off between the unemployment rate and inflation. This is not what the data indicates and definitely not of the magnitude of the 1970s. The Consumer Price Index for urban consumers (CPI-U) in the Midwest hit a year-over-year (YoY) high of 9.5% in June 2022 with an increase of 1.6% month-over-month (MoM).³ The unemployment rate for the Fort Wayne MSA (Allen, Wells and Whitley counties) in June 2022 stood at 2.9% using seasonally adjusted data.⁴

In August 2023, the CPI-U was 3.4% YoY and 0.2% MoM with unemployment being 3.3%, which indicates a tight labor market. There has been a very slight uptick in the unemployment rate while the Midwest economy experiences disinflation.

The model we created for this outlook puts Fort Wayne’s monthly unemployment rate, seasonally adjusted, between 4.2% and 4.4% in 2024 (see Figure 1). The Indiana Department of Workforce Development reports local unemployment rates without the seasonal adjustments, so readers can expect some variation from the chart below.

Figure 1: Fort Wayne MSA unemployment projections (seasonally adjusted), 2024

Source: Authors’ calculations

The seasonally adjusted unemployment rate for the Fort Wayne MSA from January 2013 to August 2023 does not have a unit root, which enables us to work directly with the unemployment data as opposed to the first difference. Whether monthly or quarterly data is used, only the first lag of unemployment is statistically significant at the 5% significance level in an autoregressive (AR) model. When using monthly data, unemployment is expected to be 4.2% by December 2024. The model is constrained by the historical data inputs, which may or may not accurately reflect the outcomes of current conditions. In short, we continue to live in unprecedented economic times, so what happens going forward can be difficult to predict because of significant demographic and consumer shifts.

Hence, assuming that disinflation continues at a gradual rate and assuming there are no big shocks to the overall Fort Wayne MSA economy, the unemployment rate is expected to increase less than one percentage point by the end of 2024 under this model. This could be very stressful for employers wishing to expand, but after years of labor shortages in the Fort Wayne area, the lack of workers no longer feels like an exigent circumstance, but rather a routine business operation. We can continue to expect to see reduced hours for consumer-facing businesses, delays in scheduling without available workers and goods-producing or goods-moving industries looking to automation to increase productivity.