Over the last year, Fort Wayne added 2,000 jobs
FORT WAYNE, Ind. (WANE) – An expert weighs in on economic topics from the housing market, to inflation, to unemployment– and what the collapse of Silicon Valley Bank means on a local level.
In a wide-ranging interview, WANE 15 talked with Rachel Blakeman, director of Purdue Fort Wayne’s Community Research Institute.
“We live in interesting times, so it’s difficult to say precisely what is going to happen with the market,” Blakeman said Tuesday. “What we’re seeing, house prices are continuing to go up.”
Right now, the sale price is a little less than the list price.
“That’s not what we saw last year. Houses were selling for more than the list price,” she said. “But the thing is, people are coming in with a higher price, still selling for more than a year ago.”
Her advice? “Marry the house and date the rate. If interest rates fall, then get into an adjustable rate mortgage or recognize that’s a short term event and then refinance when mortgage rates go down,” Blakeman said.
February inflation numbers are generally higher than a year ago. As of February 2023, there have been double digit increases – 10.1% in the Midwest – on food and beverage, a jump from 9.2% a year ago. The area is also seeing increases in the cost of energy, i.e. cost of electricity and natural gas – that is higher than it was a year ago, up 7% from 12.9% last year at this time.
But gasoline prices are cheaper than a year ago, down 1.2% here compared to 1.7% nationally.
Food, beverage and utility items are still high, and the Midwest has seen a 5% inflation rate compared to 5.5% nationally.
January unemployment statistics – the most recent available – from the Indiana Department of Workforce Development show that LaGrange and Noble counties have the highest unemployment rates in the state. Their rates “crossed over” the 5% unemployment mark indicating full employment, Blakeman said.
“It’s nothing horrible, like 5.1%, but it is a substantial increase, representing about 200 workers.” Lagrange County a year ago was at 1.8% and now it’s slightly above 5%, she said. “Is it the beginning of a new trend or will it be short lived? It’s time to wait to see if those workers will be absorbed.”
The Fort Wayne MSA, which is Allen, Wells and Whitley counties, saw a gain of 2,000 workers total. There was a slight reduction in the number of unemployed workers, Blakeman said. Adams County had one of the lowest unemployment rates in the state, she added.
Allen County unemployment hovers over 3.5%, which is “nothing to be concerned about,” Blakeman said.
Both LaGrange and Adams are important in RV manufacturing. February numbers, expected to come out in a couple of weeks, will give a greater picture of what is happening.
Banking failures of SVB and Signature are something to watch, but not worry about
“If you are in a bank that is FDIC insured, you are covered up to $250,000,” Blakeman says. “In terms of commercial bank functions, you’ll want to be calling your commercial banker.”
Some inflation is a good sign of the economy, she said. The Federal Reserve’s goal is to be at about 2% over time. “We’re nowhere close to that.”
“When we look at the February national job numbers, it’s still a strong job market on a national level. So those two things would indicate that the Federal Reserve is going to hike interest rates once again, putting the brakes on the economy to slow down inflation.”
However, the Federal Reserve is the central bank of the United States, and having two bank failures and it doesn’t seem to be, especially for Silicon Valley Bank, where there were misdeeds or some poor practices, there’s some concern about regional banks.
Interest rates will likely see a hike
What does that mean for those interest rate hikes? Pundits are predicting half percent rate increase, .25 % rate increase, holding flat or even being reduced– in other words, all over the map.
“It’s a very curious moment in time,” Blakeman said. We’ve got conflicting information. High inflation, low unemployment, but then we have some concerns about the performance of banks. Was SVB and Signature isolated or is that going to be a signal of what’s to come?