Indiana 's economic picture came into better focus with the recent release of revised employment figures for the state and its major cities by the Department of Workforce Development.  The new data tell us that the state economy largely avoided significant job losses in 2003, with gains in non-manufacturing industry employment offsetting continued declines in payrolls at the state's manufacturing facilities.  While there are winners and losers around the state, the bottom line is that the state economy looks to be in better shape than we used to think.

For those of you who are relatively new to the business of tracking state employment data, I can only say "welcome" to the world of data revision.  Those fabled Watergate reporters, Woodward and Bernstein, would have made lousy economic journalists.  That's because in the world of economic data, particularly for states and cities, getting the scoop on everyone else can be a big mistake. The wiser scribe will treat the data like wine, letting it age on the shelf before sampling its contents.

Up until last week, the data portrayed the Indiana economy as one that continued to lose jobs until the late spring of 2003, bottoming out at a seasonally adjusted level of about 2,850,000 jobs in June, followed by a mild rebound.  Now the job data say that the recession-related job declines essentially stopped in the spring of 2002, or more than twelve months earlier than previously published.  The new data portray the Indiana economy as essentially treading water from that point forward, with minimal deviations from a payroll of about 2,900,000.

For the Indianapolis metropolitan area the revisions were even more pronounced. Instead of losing almost 45,000 jobs, on a seasonally adjusted basis, over the twenty-four month period since the summer of 2001, the revised data now show a much milder, shorter-lived downturn for the Circle City . With December 2003 seasonally adjusted employment just shy of 890,000 jobs, the data now say that Indianapolis is within 5,000 jobs of attaining the payroll levels it enjoyed before the recession got started.

There are many more stories like those to tell.  The downturn in professional and business services industries employment that was so pronounced in Indianapolis has largely been erased in the new job figures. The boom and bust in the Elkhart job totalsnow shows more restraint in both directions. The statisticians found enough new jobs inTerre Haute to turn what was once a 1.6 percent job loss in 2003 into a 1.9 percent gain, while Fort Wayne found itself going in the opposite direction.

It’s more than a little discomforting to have things change like this.  At the stroke of a pen, so it seems, the stories we've written and the conclusions we made about at least some aspects of the state economy have to be scrapped.  It’s worse yet for those of us in the forecasting business, who've carefully calibrated projections of the future to trends that have now changed.

But our statistical agencies, to their credit, have always stressed getting the best estimates of economic activity possible, and if in the process a few forecasters get indigestion, then so be it.  In the months that have elapsed since the preliminary employment data were released, new information from tax records, unemployment claims, and even Census surveys have become available.  The process of reconciling earlier estimates with this new information is what ends up producing revisions.

And even though this really a story about data, there is also a story about the economy buried inside.  The pattern of revisions reveals that the services and information industries, responsible for much of the job creation in recent years, are also the hardest ones for our statisticians to accurately measure.  Smaller, and more likely to die or be borne in any given year, employers in these industries can easily be miscounted in surveys used to obtain the earliest estimates of economic activity.

The new data tell us those companies, and the economy as a whole, are doing a little better than we used to think.