My favorite crackers have disappeared from the grocery shelf. They used to cost $2.95 for an 8-ounce package.
They’ve been replaced by a new package, with a similar cracker, also priced at $2.95 per pack, but containing only 5 ounces in the same-sized box. The price didn’t change, but the quantity did. The price per ounce went from 37 cents to 59 cents for a less tasty cracker.
It’s deceptive, but the clerk at the checkout doesn’t want to hear about it and the manager would be happy if I just went on my way.
However, there are statisticians in the federal agencies who do care. At the Bureau of Economic Analysis (BEA) they are concerned with how much of our increased Gross Domestic Product (GDP) is due to price changes and how much is actual growth in the output of the economy. In the first quarter of this year, we saw GDP rise by 5.9% before adjustment for inflation. Of that increase, about 55% was due to inflation and the balance was a rise in the real output of the economy.
Naturally, as a faithful Hoosier, my curiosity demands to know about the real growth in the Indiana economy.
What’s been happening to the 65 sectors of our economy compared to those of the nation? Nationally, over the past 10 years (2014 to 2024, the period for which we have complete data), the economy has grown by 28%. In Indiana, the growth has been just 20%.
The fastest growing sector of the U.S. economy, exclusive of price changes, has also been the second-fastest growing part of the Indiana economy. Nationally, data processing, hosting and other information services have grown by 291%, while in Indiana the growth has been 172%.
Maybe now we can begin to understand why there is such a push for data centers.
Simultaneously, Indiana’s fastest-growing subsector has been a 180% increase in computer systems design and related services. This is faster than the national growth (162%).
While we are in sync with the nation in these two areas, we are on opposite paths in regard to computer and electronic product manufacturing. Across the nation, the growth rate over 10 years has been 32%, but Indiana has witnessed a 6% decline.
As many have discovered, money goes where money grows. Primary metals continue to be a strong factor in our state’s economic growth, advancing by 52% in the decade, but trailing the national advance of 63%. While utilities in the U.S. have increased output by 21%, Hoosier firms have seen a 2% decline in output.
When the new Secretary of Commerce joins the Gov. Mike Braun’s cabinet, he might want to acknowledge that Indiana trailed the nation over the past 10 years in 36 of the nation’s 65 economic sectors.
During this same period, we have been regaled with the amazing − nay, astonishing − triumphs of our state’s economic development program.
Perhaps, the government should not be in the fabrication business.
Morton Marcus is an economist. Reach him via email at mortonjmarcus@gmail.com.
This article originally appeared on Evansville Courier & Press: How much is actual growth, and how much is inflation? | Opinion
Reporting by Morton Marcus, Columnist / Evansville Courier & Press
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By Morton Marcus, Columnist | USA TODAY Network
