By Marilyn Odendahl, Truth Staff
modendahl@etruth.com
September unemployment numbers indicate Elkhart County is going back to work, but one economist is warning the recovery from this recession will be slow and higher than normal jobless rates could linger for another two years.
The county's unemployment rate was 15.0 percent for September, according to figures released Wednesday by the Indiana Department of Workforce Development. Despite this being the sixth straight month of decline after hitting a high 18.9 percent in March, Elkhart County still leads the state in joblessness.
In addition, the cities of Elkhart and Goshen recorded significant drops in unemployment but continue to rank as the top two municipalities with the most residents out of work. Elkhart fell to 17.8 percent joblessness from 18.7 percent in August while Goshen tumbled to 13.9 percent from 15.0 percent.
Michael Hicks, director of the Bureau of Business Research at Ball State University, believes Elkhart County will see unemployment back in the single digits by the summer of 2010 although the rate will remain above what economists call the "natural unemployment" of 5.5 percent.
"I would anticipate a lengthy period of above average unemployment rate for you guys," Hick said, explaining that time frame could last another year or two. "Hopefully I'm terribly wrong."
Indiana as a whole placed among the top four states that posted the largest over-the-month increases in employment, according to the U.S. Bureau of Labor Statistics. With non-farm employment growing by 4,400 jobs in September, Hoosiers saw the jobless rate drop to 9.2 percent from 9.7 percent in August.
Namely, the state's manufacturing sector added 3,000 in September while the professional and business service sectors created 2,900 jobs, the DWD reported. However, the construction segment lost 3,300 positions.
Even though he is confident Indiana's economy has entered recovery mode, Hicks cautioned the growth could be hindered by a staggering federal deficit as well as by such looming federal legislation as cap and trade, health care and the employee free choice act.
The deficit, Hicks said, will most likely force the Federal Reserve Board to raise interest rates which will cause businesses to hold off borrowing and, therefore, slow plans to open new operations or hire more workers.
Coupled with this fear, businesses are uncertain what impact the major bills being crafted by U.S. Congress will have on their bottom line, Hicks said. Not knowing how much or how little the impending legislation will cost probably will induce most businesses to wait longer before making any decisions to expand.
Consequently, Hicks said, Indiana's economy "could take a very long time to get back to where it was in the really hot times."