(INDIANAPOLIS) — Indiana University economists expect Indiana’s economy to rebound from the pandemic next year — but not until summer or fall.
Indiana’s unemployment rate is 6.2%. The annual forecast from IU’s Kelley School of
Business expects it to improve to below 5% by this time next year.
But economist Kyle Anderson says the economy may shrink over the next four-to-seven months
before the turnaround begins. He predicts a return to what the economy looked like last fall, but
notes that would mean two years of economic growth lost to the coronavirus pandemic.
Anderson warns the economy won’t fully recover until the pandemic is under control. He
says regardless of whether there are new official restrictions, people aren’t going to shop or eat out
until they feel confident they’re safe. He says consumer spending on goods is improving already, but
services are lagging behind.
Indy Chamber president Michael Huber warns the politicization of the response to the virus
complicates the recovery effort. Since the virus doesn’t observe geographic or political distinctions,
he says counties which resist mask-wearing and social distancing end up hamstringing growth
statewide.
Anderson says he’s not sure what to expect economically from President-elect Joe Biden’s
administration, since the campaign centered more on the pandemic and the temperaments of Biden
and President Trump than on policy proposals. He says he’ll be watching to see if Biden can bring
about a cease-fire in the trade wars he says have hit Indiana particularly high, given the state’s heavy concentration of manufacturing and farming.
And Anderson says Congress needs to pass a new relief package for both businesses and
consumers, preferably without waiting for Biden to take office.
