Those of us who live and breathe economic data are usually one to two months behind the rest of the world. So as football practices get started and stores start cranking up their back to school advertisements, we're still living in the first half of the year, collecting and digesting the reports. While the picture is far from complete, we can at least get started in assessing how the Indiana economy fared in the first six months of 2001.

Given the length and severity of the manufacturing slowdown in the national economy, the good news is that the overall economy in the state has not yet suffered as much as some had feared. But the contrast between the fragile state of today's economy, and the hard-charging, bullet-proof growth of just twelve months ago, is still quite jarring. What that means is that there is still bread on most of our tables to let us get by quite comfortably, but that those institutions -- and governments -- who were depending on faster growth are feeling the pinch.

There are at least three industry sectors with a sizable presence in Indiana who are taking it on the chin in 2001: primary metals, industrial machinery, and electronic equipment manufacturing. These three industries account for about 45 percent of the nearly 650,000 manufacturing jobs -- 3.7 percent of the total -- that have been eliminated, nationally, since the beginning of the year.

In Indiana, those industries have also made job cuts, but total job losses since the end of 2000 have been only 8,000. That also coincides with the total number of manufacturing job cuts over the first six months of the year, representing only 1.6 percent of the job base. That small number is a bit misleading, however, because the slowdown in Indiana manufacturing got an earlier start than the nation as a whole. Compared to twelve months ago, or June 2000, Indiana manufacturing payrolls number almost 27,000 jobs fewer, or 3.9 percent of the total factory job base.

It’s a bit ironic that one of the reasons why Indiana has escaped some of the harsh punishment doled out to national manufacturers is because of our lower presence in the manufacturing of higher technology equipment, particularly computers. Those industries have been high on the wish lists of many economic developers, including those in Indiana.

Meanwhile, the Indiana unemployment rate continues to oscillate about a level that is not only low compared to our neighboring states, but also compared to our recent history. The June jobless rate for the state was just 3.4 percent, seasonally adjusted, or exactly the same as in June 2000. It is tempting to conclude that the state's surprisingly stable unemployment rate also reflects this milder-than-average downturn in the manufacturing sector, but doing so would be risky for at least two reasons. The first is that the manufacturing employment data, like all of the job statistics for the state economy in 2001, are still preliminary and thus subject to what sometimes proves to be substantial revision.

The problem is that the unemployment rates in Indiana, like a lot of Midwestern states, just don't correlate very well with other indicators, particularly unemployment claims, which are running 70 percent higher now than last year. The "look and feel" of the Indiana economy of 2001 bears the imprint of the national slowdown, even if the jobless rates do not.