(Statewide) – In 2025, Hoosiers will see lawmakers setting a new budget, in addition to getting a new Governor, a new U.S. President, and more. So, what does that mean for the state’s economy?
Ball State Economist Michael Hicks told Indy Politics Wednesday that the national economy seems to be moving in the right direction.
Hicks explained that “wages have now outpaced inflation for more than a year,” “mortgage interest rates are coming down,” and “labor markets are strong.”
While Indiana is also benefiting from these improvements, Hicks noted that the state’s economy still lags behind the nation’s, in part because of the impact of high interest rates on the manufacturing sector.
So, why is the federal deficit so high? Well, the economist said Americans basically receive lots of “goods and services” – including programs like Medicaid – in exchange for paying relatively low taxes.
Unfortunately, this means that you may not get the breaks promised by Governor-elect Mike Braun during his campaign. Hicks argued that “the budget challenges that he faces don’t align very easily with the goals of cutting taxes.”
Braun may also have to address Hoosier wages, which are now about 13% below the national average. They were about 6% below the national average in 2017.
Thankfully, Hicks noted that the U.S. has “mostly tackled inflation,” meaning a recession is not on the horizon.
