There are some rays of hope sprinkled in the NWI Index, a new two-part barometer of the Northwest Indiana economy, but causes for concern remain.
The NWI Coincident Index moved up one tick to a 101 reading in July, mainly because of strong growth in retail sales. The NWI Leading Index also turned in a positive reading of 3.24 percent, based on a big gain in housing market confidence as well as small gains in other index components.
The indexes were developed this year by two professors at Indiana University Northwest's School of Business and Economics and are published monthly in The Times and on nwi.com.
"It looks like U.S. retail sales really pushed the coincident index upward, so that tells us people are buying more," said Bala Arshanapalli, a professor of finance and one of the creators of the indexes. "Let's keep our fingers crossed and hope it keeps going."
The leading index was powered upward by an unusually large leap in the Housing Market Index, so people should be a bit cautious about reading too much into the figures, said Donald Coffin, IUN emeritus professor of economics and the other creator of the index.
Two straight months of decline in production for a national steel industry that has shown little real growth in the last year also remains a cause for concern, Arshanapalli said.
"With the steel industry, I'm concerned is this seasonal, or is it a trend?" Arshanapalli said. "We have to wonder."
However, Coffin noted there was generally a broad upward movement in all components of the leading index, which has moved upward in nine out of the last 12 months.
"It's not that this seems to be concentrated in one part of what's going on, but it's across the board -- which is good," Coffin said.
The NWI Coincident Index shows the state of Northwest Indiana's economy at the current time. Its four components are steel production, local employment, national retail and food sales, and manufacturing hours worked.
The NWI Leading Index is a forecast of how the local economy is likely to be performing six months from now. It has a broader range of components than the coincident index and is made up of a number of traditional prognosticators such as interest rate spreads and the Purchasing Managers' Index.
Northwest Indiana Forum CEO Mark Maassel said this month's NWI Index findings concur with what his economic development group is seeing in the local and national economies.
"All the uncertainty out there is making people hesitant," he said. "But balancing that there is a sense of willingness, of eagerness, to move forward. And right now, people are torn between those."
The Leading Index for Indiana, published monthly by the Indiana Business Research Center, also registered a meek gain of 0.2 percent in July after yielding a flat reading the previous month.
Local hiring is still a slow go, with the volatile employment component of the NWI Coincident Index including a drop of 2,000 jobs at local employers. Wide monthly swings are common in that component, which is not seasonally adjusted, but the overall pattern for the last year shows the area has added few jobs.
Employers for the most part are still trying to make do with their current workforces to get things done, mainly by increasing productivity and work hours, Maassel said.
Even if job creation picks up nationally as it did last month, the unemployment rate is likely to remain high as increasing numbers of people resume their search for work, Maassel said.