Local unemployment dips below 2%

Unemployment in Bartholomew County ticked down last month while the local labor force remained below pre-pandemic levels.

The jobless rate in Bartholomew County stood at 1.9% last month, down from 2.3% in November but up from 1.2% in December 2021, according to figures released this week by the Indiana Department of Workforce Development.

Indiana’s jobless rate in December was a seasonally adjusted 3.1%, just a notch up from 3% the previous month and up slightly from 2.7% in December 2021. U.S. unemployment stood at 3.5% last month, down slightly from 3.6% in November and 3.9% in December 2021.

At the same time, the the local labor force in December continued to be significantly lower than pre-pandemic levels. Last month, Bartholomew County’s labor force stood at 43,738, up from 42,442 in December 2021 but down from 45,418 in December 2019, before the pandemic struck.

The update from state officials came just days before the federal government reported that the U.S. economy expanded at a 2.9% annual pace from October through December, The Associated Press reported.

Overall, the U.S. economy ended 2022 with momentum despite the pressure of high interest rates and widespread fears of a looming recession, according to wire reports.

On Thursday, the Commerce Department estimated that the nation’s gross domestic product — the broadest gauge of economic output — decelerated last quarter from the 3.2% annual growth rate it had posted from July through September, according to wire reports. Most economists think the economy will slow further in the current quarter and slide into at least a mild recession by midyear.

The economy got a boost last quarter from resilient consumer spending and the restocking of supplies by businesses, according to the AP. Federal government spending also helped lift GDP. But with higher mortgage rates undercutting residential real estate, investment in housing plummeted at a 27% annual rate for a second straight quarter.

For all of 2022, GDP expanded 2.1% after growing 5.9% in 2021.

The economy’s expected slowdown in the months ahead is an intended consequence of the Federal Reserve’s aggressive series of rate increases, according to wire reports. The Fed’s hikes are meant to reduce growth, cool spending and crush the worst inflation bout in four decades. Last year, the Fed raised its benchmark rate seven times. It is set to do so again next week, though this time by a smaller amount.

The resilience of the U.S. job market has been a major surprise. Last year, employers added 4.5 million jobs, second only to the 6.7 million that were added in 2021 in government records going back to 1940, according to wire reports. And last month’s unemployment rate, 3.5%, matched a 53-year low.

But the good times for America’s workers aren’t likely to last. As higher rates make borrowing and spending increasingly expensive across the economy, many consumers will spend less and employers will likely hire less.

Consumer spending, which fuels about 70% of the entire economy, rose at a sturdy 2.1% annual rate from October through December, down slightly from 2.3% in the previous quarter, according to wire reports.

More recent numbers, including a 1.1% drop in retail sales last month, indicate that consumers have begun to pull back.

Economists at Bank of America expect growth to slow to a 1.5% annual rate in the January-March quarter and then to contract for the rest of the year — by a 0.5% rate in the second quarter, 2% in the third and 1.5% in the fourth, according to wire reports.

The Fed has been responding to an inflation rate that remains stubbornly high even though it has been gradually easing. Year-over-year inflation was raging at a 9.1% rate in June, the highest level in more than 40 years. It has since cooled — to 6.5% in December — but is still far above the Fed’s 2% annual target.

— The Associated Press contributed to this story.