The Indianapolis Metropolitan Statistical Area (MSA) is not strong based on the latest employment data. According to the Current Employment Survey (CES) data from the U.S. Bureau of Labor Statistics (BLS), the total number of non-farm wage and salary employees was only 9,900 (1.1%) higher in June 2012 than it had been in June 2011. The job gain during the previous 12 months had been slightly higher. Household-based data on the number of employed residents of the MSA, including the self employed, is more disappointing. The year-over-year increase to June, according to this source, is just 3,850 (0.5%) with the overall labor force falling by 3,700 (1.4%). The unemployment rate is slightly below average for the U.S., but the number of jobs in the MSA as measured by CES data remains 28,300 (3.1%) lower than in June 2007. At this rate, regaining the peak level will take several more years.
CES data for the year to June shows a mixed picture of the office- and industrial-based sector. Financial Activities show a loss of 1,000 jobs (1.7%), but Professional and Business Services show a gain of 7,600 (6.0%). That gain is driven primarily by an increase of 4,000 (11.5%) in the Employment Services industry, which includes temporary workers. Among the distribution-oriented sectors, Wholesale Trade shows a loss of 1,200 jobs (2.6%) but Transportation and Warehousing shows an increase of 2,300 (4.8%). The Manufacturing sector, meanwhile, added 2,300 jobs (2.8%) in the year to June, with much of the strength related to the recovery of the Midwest Motor Vehicle Manufacturing industry. While the vehicles may be built in Michigan or Tennessee, Indiana provides many of the parts.
This has been a consumer debt and housing driven recession, and many of the weakest sectors in Indianapolis are those related to local consumer demand. Household average income is relatively low here according to Moody’s Economy.com, and after falling sharply in the Great Recession, the second quarter 2012 reading remained significantly lower than at year-end 2008 following a 1.1% year-over-year gain—less than the rate of inflation. The median existing home sales price, as measured by the National Association of Realtors, was also low at $135,100 in the second quarter, but it was up 6.2% from a year earlier. On the other hand, Indianapolis continues to have a relatively high rate of population gain compared with the rest of the Midwest. Moody’s Economy.com projects the 2012 increase at about 25,900 (1.4%), faster than the U.S. average, with slightly smaller gains forecast for subsequent years. The labor force decrease, however, may indicate a slowdown.
CES data show that Retail Trade employment fell by 4,100 (4.5%) from June 2011 to June 2012, including a decrease in of 1,000 (4.9%) in the big- box General Merchandise Store category. Leisure and Hospitality employment fell by 600 (0.7%) during the period. Ongoing fiscal crises led to decreases of 700 jobs (1.0%) in local government and 700 (0.5%) in the substantially government subsidized Educational and Health Services sector. On the other hand, the Construction sector added 5,500 jobs (13.4%) and may have hit bottom. It remains down 8,600 (15.6%) from June 2007.