Report: Indiana economy is stalling

The state economy seems to be stuck. After a decrease in economic activity in July, the economy stagnated at about the same level in August.

“The Indiana economy is slowly coasting, not accelerating but not lurching to a stop,” according to the Leading Index for Indiana, a project of the Indiana Business Research Center at IU.

The LII measures economic activity in all sectors of Indiana and applies a numeric value to the economy. It has been doing so since 1997.

The LII declined from a four-month peak of 96.5 in June to 96.3 in July. The August value was 96.2.

The highest value recorded for the LII was in April 2006 with a value of 103.9. The LII quickly tapered after that and fell precipitously during the 2008 financial crisis to its lowest recorded value, 94.6.

Some recovery was made during 2009 and 2010, but almost half of the gains made since 2009 and all of the gains since 2010 have been lost as Indiana’s economy plateaus.

The automotive industry did not fare well last month, the report indicated. Car dealerships saw a 1.3 percent decrease in floor traffic, and the Dow Jones Transportation Average cascaded by about 10 percent.

The LII report also noted that the “Jitters Index,” which measures consumers’ uneasiness with the economy, rose by 7 percent last month.

The LII issues warnings if the value drops consecutively for several months, which means a recession could be imminent. However, there is no sign of an impending double-dip recession in Indiana, at least for now, the LII indicated. The last time warnings were issued were September 2010 and during six consecutive months in 2008 and 2009, during the financial crisis.

— Zach Ammerman