Mendoza School of Business

Soft recovery may be a bad sign for state

Published: June 4, 2011 / Author: Ted Evanoff

The following is an excerpt from iStockAnalyst that quotes Jeff Bergstrand, finance
professor, on the economic recovery in Indiana.  To read the entire article visit:
 Soft recovery may be a bad sign for state.

America’s economic recovery has turned fragile just as Indiana was ready for a
burst of new jobs — spurring calls for U.S. policymakers to gear up a new
job-creation strategy.

The national unemployment rate rose to 9.1 percent last month from 9 percent
in April, the federal government reported Friday.

Economists called another recession unlikely and said the United States instead seems mired in a soft recovery.

Indiana’s jobless rate had fallen faster than the nation’s, reaching 8.2
percent in April, down from 10.5 percent a year earlier.

But economist Michael Hicks said the tepid national recovery means Indiana’s
jobless rate probably won’t drop to 6 percent until early 2013.

“If you look at where we are now, it’s still economic growth, but it
doesn’t reflect increasing growth,” said Hicks, director of Ball State
University’s Center for Business and Economic Research. “Still, I don’t
think it looks like we’re turning the corner into a recession.”

Economists pinned the rise in
unemployment on high gasoline prices dulling consumer spending and the March 11
earthquake and tsunami in Japan. U.S. factories idled workers after running
short of industrial supplies made in Japan.


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