Northwest Indiana see signs that recession is ending

Some economists and financial analysts are declaring the recession that has gripped the nation for almost two years has ended or will soon.

But business leaders in Northwest Indiana say while there are some signs of relief, it could be awhile yet before real recovery is felt here.

"Some of our members have felt the recession in their stores. I don't know that any recovery has trickled down to the stores and home towns yet," said Diane Kemp, interim executive director of the Greater Crown Point Chamber of Commerce.

President Barack Obama and other government leaders have been pinning their declarations of hope on forecasts by reputable economists and independent economic forecasters.

In a Wall Street Journal poll of economists, a majority said the recession is over or nearing an end. Daniel Gross, a columnist for Newsweek magazine, cited two objective forecasters -- St. Louis-based Macroeconomics Advisers and the Economic Cycles Research Institute -- in announcing in the Aug. 3 edition that the recession "most probably has ended."

Macroeconomics Advisers based its opinion in part on the fact that the monthly Gross Domestic Product Index rose to 2.4 percent in the third quarter from 0.1 percent in the second quarter, Gross stated. The research institute, Gross said, cited a pronounced rise in the leading indicators that has persisted for at least three months, and is pervasive, meaning a majority are moving in the same direction.

Locally, leaders in the housing, investment, employment and retails sectors -- all of which have been hit hard in this worst economy since the Great Depression -- say they have been seeing some upturn.

"I don't know whether the recession is over or not, but housing has made some pretty good turnaround in the last three to four months in Northwest Indiana," said Pete Novak, chief executive officer of the Greater Northwest Indiana Association of Realtors.

He said most buyers are investors looking for a good bargain and new home buyers taking advantage of the federal government's stimulus program, but he is now also starting to see more average homeowners in the market, too.

"They are more confident that the economy is going in the right direction," Novak said.

He said it is hard to say if distress sales are subsiding, but he does know that inventory is down from six to nine months ago.

Kemp said she has not heard of any locally owned Crown Point store having to shutter its doors due to the economy, even though they have felt its sting. Nationally, retail has taken a hit since the recession was officially declared to have begun in December 2007, with a number of retail chains filing bankruptcy. In the latest report, released last week, the Commerce Department said retail sales fell 0.1 percent last month. Economists had predicted a 0.7 percent gain. Economists say this shows the consumer is still weak, as unemployment continues to remain high.

Locally, unemployment numbers remain in the 10 percent range, according to Marc Lotter, spokesman for the Indiana Department of Workforce Development.

He said Porter County had no change in its 9.6 percent unemployment rate from May to June, and Lake County held steady at 10.5 percent. On a more positive side, Newton County went from 10.9 percent to 10.8 percent, Jasper County from 9.8 percent to 9.5 percent and LaPorte County from 11.7 percent to 11.5 percent.

"We're starting to see some encouraging signs, but we still have considerable job losses in manufacturing," Lotter said. However, he said, the number of help-wanted ads have increased in the past two months.

Marcy Peterson, staffing specialist with Manpower in Valparaiso, said it looks like jobs are beginning to pick up in manufacturing and other areas, including retail. She sees some gains in both short-term and long-term jobs.

However, David Millhouse, a senior investment adviser for J.P. Morgan's Private Wealth Management business covering northern Indiana, predicts unemployment for the region and country will continue to rise until the second quarter of 2010, and will remain higher than the low rates of a few years ago for some time to come.

He said while Standard and Poor's stock index has risen 40 percent since March, much of the stock increases have been due to corporations that have improved their earnings through reduction of staff.

"I'm not seeing that the recession is over yet, but there are some good signs pointing to recovery," said Millhouse, who added that the country is pulling out of the recession on its own, without the $787 billion economic stimulus plan and other government programs.

He said in order to really be on the road to recovery, people need to start spending, and companies need to start hiring and producing.

"Companies have been under producing and they're going to have to start picking up production. I've seen these both in the auto and steel industries," he said.