WTHR |IU economists forecast more job losses for Indiana
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Indianapolis - A group of the state's most prominent economic experts Indiana will be fortunate to escape 2009 suffering only a mild recession. At best, their economic forecast for the state is grim.
Job hunters leaving the east side Indianapolis unemployment office aren't looking any happier than they went in.
Laid off weeks ago, Dale Walker says he's selling plasma to buy gas. "People don't know whether to hire you," Walker explained. "They don't know whether the economy is going up or down."
It's definitely going down, according to Indiana University's annual economic forecast. Its team of financial all-stars were painfully blunt during a breakfast briefing.
"We expect things to be grim over the next year," said Prof. Bill Witte, IU Kelley School of Business.
"It's ugly in the markets, real ugly," said Prof. Rob Neal, IU Kelley School of Business.
"It's going to be a long cold winter, with some dark nights," said Prof. Phil Powell, IU Kelley School of Business.
The collapse of the housing market, rising unemployment, scared consumers cutting back on spending and the nation's financial crisis are a frightening combination.
"A combination that could make the recession we're in deeper and longer than a typical recession," said Prof. Neal.
The economists forecast a recession at best mild, at worst severe, including an Indiana economy slowing and losing a thousand jobs a month next year, pushing unemployment even higher, perhaps as high as 7 percent.
Next year's average household and personal incomes are predicted to stay flat at best.
"And if you compare it to what's happened in the past, we're not going to see the labor market recover for another 18 months," said Powell.
Beyond the economic gloom, however, some rays of economic sunshine are in the 2009 forecast.
The stock market, though remaining volatile for months, is predicted to improve by mid year, and the housing market after that.
Home prices, interest rates and inflation are expected to stay low.
The panel will present its findings in nine other cities across the state through Nov. 18.
Personal finance links:
MSN Money
Kiplinger
Dave Ramsey's Financial Peace
Forbes Personal Finance
Yahoo Finance Tools
Home Value calculator
Kelly Blue Book
Bloomberg 401K calculator
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