Indiana Business Outlook Panel: Jasper

Outlook 2021: Jasper

The year 2020 has been unprecedented, and there are many unknowns heading into 2021. This virtual event is your chance to hear the perspectives of several of the state's leading economic thinkers as we all wonder what is in store for 2021.

12 pm on Thursday, November 19

Faculty members from the IU Kelley School of Business and local panelists will offer forecasts and perspectives on the global, national, state and local economies, as well as the financial markets.

There will also be a Q&A session to answer attendee questions.

This event is sponsored by the Rotary Club of Jasper

Description of the video:

Good afternoon. My name is Christian bloom and on behalf of the Rotary Club of Jasper, I'd like to welcome you to our 16th annual Indiana University's Kelly School of Business virtual economic forecast. The Rotary Club of JASPAR is proud to host today's event and discussions from an elite panel of experts. Rotary started in Chicago, Illinois in 1905, and today includes clubs all over the globe with over 1.2 million members, including our very own Rotary Club of Jasper. Rotary is a civic club made up of people who are passionate about serving others and making things happen for the greater good by creating partnerships and aligning resources through our various personal and professional networks. Rotary is for people just like you. Professionals, retirees, youth, anyone who's passionate about making a difference in their community. Internationally, Rotary is committed to promoting peace, fighting disease, providing clean water, sanitation and hygiene, helping mothers and children, and supporting education and growing local economies. Here in Dubois county, you might know rotary for our annual Athena Leadership Award are clay shoe at LFS, Cool Springs. Thank you to o fs or through our high school club at jasper highschool called rotary interact. We're also known for our mini grant projects where our partnerships have included the local parks department, try cap, the Department of Natural Resources or local churches. Most recently with Memorial Hospital, where we are providing a month's supply of diapers and a children's book to parents of 11000 babies over the next year. As you can hear, the Rotary Club of JASPAR is a club of action and service. And today's program is part of our effort supporting education and growing local economies. You are also passionate about serving others. I invite you to visit our club and find out how you can get involved. Contact us through our Facebook page, Rotary Club of Jasper, Indiana, or by emailing our our Membership Chair Michael oh, linger at NOL ING ER, at that's freedom dot bank. Next, I'd like to thank our bull and bear sponsors for making today's program possible. Thank you. Bowl sponsors, German American Bank, Eagle crest financial, Kimball electronics, wi TZ WQ Casey, old National Bank. Can send awake with Merrill Lynch and W BDC, wj TS. Thank you to our bear sponsors of Jasper group, freedom bank OFF S, master brand cabinets, springs Valley Bank and Trust, and the city of Jasper. I'd also like to mention a special thanks to rotations, Derek Bud, and Nick's Stevens for coordinating and organizing today's event on behalf of the Rotary Club of Jasper. And lastly, I'd like to thank our esteemed panelists for giving their time today to educate, enlighten us. We greatly appreciate you and your willingness to share. Our moderator today is Dr. ID Kasner, Dean of the Kelly School of Business at Indiana University. She's also the Frank P. Pop off Chair of strategic management. Her research focuses on corporate boards, executive succession and mergers and acquisitions. Being Kasner earned her MBA and PhD from the Kelly School of Business and her bachelor's degree in business administration from Southern Methodist University. Please join me in giving a warm virtual Welcome to Dean Kasner. Thank you so much Christian and IQ went to welcome every y and a special thank you, Kristen, to you and to the Rotary Club for welcoming and hosting us today. I also want to thank our generous sponsors for their support of this, of that. Before I introduce our panelists, I want to say just a brief word about the Indiana Business Research Center, otherwise known to us is IDRC, the Ib RC as his center within the Kelly School of Business at Indiana University. The Kellogg's School just celebrated its synteny, our 100th anniversary. And the ITRC has been a part of the school for nearly its entire history. Since 1925, I PRC has monitored socioeconomic trends as they relate to our state, the Midwest region, and indeed even the nation. Idrc provides an interprets economic information needed by businesses, governments, and non-profit organizations may have things such as Stats Indiana, which is statistics for states, counties, cities, towns, townships, regions, census track and more. They are stats America, which is a portal to us data supported by the US Economic Development Administration. There's something called Hoosiers by the numbers, which is workforce data and unleashing data for decision-making and Research, which is a partnership of state agencies and the Indiana Business Research Center to improve the quality and usability of state data. There's Indiana gateway, which provides information about how taxes and other public dollars are budgeted and spent by Indiana's local units of government. There's a Center for Economic Model researcher, CMR, which provides quarterly economic forecasts for the United States, Indiana and the Indiana metropolitan areas. Irc has quite a few publications in context provide substantive, easy to read articles about Indiana's workforce and economy. It's published on a bimonthly basis. Indiana Business Review, which has been published in 1926. This provides analysis and insights on Indiana's economic and demographic issues. And Indiana died to economic digest, which examines daily news from newspapers around the State focusing on hot business topics. So you can see there's a lot of data that's collected and I hope you'll turn to IDRC not only for its publications, but if you need help with data in your area. Now let me introduce our three panelists who are going to be starting with Dr. Elly MFI crap. Dr. Matthew crap is a native of France. She holds a BS, MA, and PhD in economics. She's a Clinical Associate Professor of Business Economics and Public Policy at the telescope business since 2006, and an affiliate faculty of the Institute for European studies. She co-authors the yearly international outlook for the IDRC, or professional interests, are in international economics with an emphasis on the relationships between business, government and society. And she is also interested in Strategic Sustainability. Genuine. Chen Yi Wang is Professor of Business Finance and the Edward II Edwards professor at the Kelly School of Business in Indiana University. He was formerly a vice president at the Federal Reserve Bank of New York, where he was the head of financial intermediation. Before working at the New York Fed, he was a faculty member at graduate school of business and Columbia University for nine years. And he was at the School of Business at UT Austin for one year. Professor Wang obtained his PhD degree in economics from the University of Minnesota. And Ryan brewer. Dr. Barry is an associate professor of finance at Indiana University Columbus, where he's taught undergraduate graduate courses in corporate finance, investments and derivatives since 2009. He's testified as evaluation expert in US federal and Indiana state court system. Many worked for five years as a risk manager for a Fortune 50 company in Michigan and Indiana. He holds an MBA and PhD from the Kelly School and a BS in Engineering from Purdue University. As a turnover, the add time to Dr. Matthew craft, I want to remind all of our audience members that they can submit their questions that they have through the Q and a function which will appear at the bottom of your screen. And I'll bring those questions to our panelists. After all, have spoken. Thanks. Thank you very much, Dean Kasner and hello to everyone. And The Lottery Club ingest them. So at a time when health official are restricting our travel and asking us to stay home. My mission in the next few minutes is to take you around the globe, emphasizing on the US, China, your area, and Latin America. So last year, our group at the Indiana Business Research Center forecasted a global output growth of about 3% for 20-20. But a microscopic virus came into the picture. And instead of a growth in economic activity. We are experiencing a global recession of a magnitude not seen since world war two. It is estimated that by the end of 20-20 to global economy will have shrunk by 4.4%. The numbers forecasting today may not be relevant tomorrow. Because the pandemic, which is our greater obstacle to the recovery, is something that we have never experienced in modern times. As long as the virus circulates, unchecked, growth is compromised. At any moment, a resurgence of coffee 19, In fact, in infection and subsequent tightening government restriction can threaten to drag the world in an even more prolonged recession. I'll group is cautiously optimistic that our estimate of 5% global recovery in 2021 will be just enough to erase the 20-20 Global drop in output. So let's look at the United States a little bit more closely. In the second quarter of 20-20, The Bureau of Economic Analysis recorded macroeconomic statistic never seen before. From April to June, the year over year decline in US GDP was 9.5%. To put that in historical perspective, at the height of the global financial crisis, in the second quarter of 2009, the GDP contracted by 3.9%. In April 2020, the US Bureau of Labor Statistics recorded a record unemployment rate of 14.7%. As more than 20 million Americans abruptly lost their jobs, it could take years to return to the 3.5% unemployment rate. The US recorded in February 20-20. Because no one really knows what the post pandemic economy will look like. Corporate default rates are increasing. And more than half of the small business owners surveyed by the US Chamber of Commerce worry about having to permanently closed that businesses. Clearly, the pandemic has created extraordinary circumstances and new challenges for the policymakers. In the United States and around the globe. It has affected aggregate supply and aggregate demand simultaneously. These two sided market shock has consequently intensified the need for greater and more coordinated interaction between monetary policy and fiscal policy. To try and minimize the economic harm. In regard to monetary policy, the Federal Reserve lowered its policy rate to near 0 and increased its holding of US securities to help keep consumer credit available and borrowing costs low. Additionally, in order to continue to support the nation's recovery, the 0 interest rate policy was announced to last through 22-23. In regards to fiscal policy, the US Congress voted the cares ACT that provided help to families and businesses. As of now, Republicans and Democrats have not been able to agree on a renewed fiscal package in a country where inequality is rising and racial and ethnic minorities are left behind. The downside risk to the forecast in the United State is the intensifying political divisions. However, thanks to the country structural potential, technology advancement, a very flexible labor force, as well as the flexibility of the economy and the world appetite for the dollar. We estimate growth in the United State to be above 3% in 2021. So now let's look at the second largest economy in the world, China. At the start of 20-20, China experienced its first output decline in more than four decades and is now experiencing the slowest annual growth since Mao's Cultural Revolution in 1976. That said, China will be the only major economy with a positive growth in 2020. We forecast China's GDP to expand by 2% in 2020 thanks to a robust recovery that has not been obstructed by a strong resurgence of the coronavirus. It is projected that GDP growth in China will further increase in 2021 to above 8%. The return to growth in China has been powered by the countries state back in the industrial sector thanks to a pandemic that originated within its borders and left economies outside of China. Laundry. China's manufacturing power shifted to address the global demand for medical products and other work from home equipment. However, I meet global backlash over coronavirus, as well as calls for inquiries from Australia. Continued rising tensions with the United States on trade and technology. And growing US led coalition against Huawei. Global demand for Chinese products is decreasing. Furthermore, South Asian countries such as Vietnam, with a lower wage environment unless trade risk are emerging as a more attractive trading partner in the global supply chain. Nevertheless, it is important to signal that China's relative strong recovery has supported and is supporting many economies around the world. Specifically, China's stimulus led infrastructure expansion allowed many export-led countries, in particular, commodity exporters to recover while their service activities continues to be hampered by the resurgence of the virus. Next, like cleans. Now let's move on to the euro area. The area is divided into zone, the North and the South. In the North, Germany and Netherlands have leveraged their large budget surpluses and robust industrial structure to straighten their resiliency to the pandemic. However, in the south, in Spain, Portugal, Italy have put the most stringent lock downs and counted the greatest number of death. Their fiscal space was initially more constrain, and therefore the safety net they could offer to their businesses and their residents, more limited. Furthermore, the southern economies do rely heavily on tourism, particularly in a country like France, which rely heavily on tourism, aeronautics, and luxury products. Some of the hardest hit economic sector during these pandemics, the economic burden has been insignificant. This north, south dichotomy in the Euro area was viewed initially as the last straw to the fragile unity in the region. But unprecedented coordinated effort from the European Commission on the fiscal side and European Central Bank on the monetary side, have so far supported the Euro area by limiting the economic devastation. Although we estimate that by the end of 2020, the Eurozone annual GDP will dropped by 8%. Safety nets that were deployed by the, by the European institution will remain essential to stabilize the European financial markets. Likewise, the safety nets will support a nation's expenditure related to the pandemic, provide credit guarantees to firms and support the most vulnerable households in Europe. We are hopeful that with a sustained coordinated fiscal and monetary stimulus, the Eurozone economy will rebound and that economic activity will increase by 5% in 2021. Finalists. Look at Latin America. This region include large economies such as Brazil, Mexico, Argentina, that represent 8% of the world's population and accounts for 30% of global covet, 90 cases and 1 third, the death. Many countries in the region depend on tourism. Commodity exports, or capital inflows include a Remy tenses with commodity prices at their lowest historical level, tourism at a stand still, and remittances dropping as unemployment has resend around the world. These economies are greatly heat impacting the region as a whole. Furthermore, these emerging markets cannot increase there and that meant without raising fear of future default, the macroeconomic tools to less than the categories of coffee, 19 are limited and therefore, a return to pre pandemic growth rate would likely take years. Adding to concern social and political problem in the region are about raise ten years of sustained increases in middle-class living standards. Next slide please. So in conclusion, in the first part of 20-20, virtually every country in the world experienced across I simultaneous collapse of economic activity. Mind you, a collapse that was historically unmatched in time of peace. The swift, comprehensive and well targeted monetary and fiscal support is improving the prospect that an economic recovery will be achieved by the end of 2021, pending the absence of prolonged lock downs. Some countries have more budgetary rooms to maneuver and are enjoying lower cost of ball away. Others with higher debt service costs have to rely on global solidarity. This health-related crises is highlighting the fact that our global market approach to trade and that has many point of interconnectivity is only as strong as the weakest health system. Economic survival will be the focus in the short-term. In 2021. However, more long-term resiliency will need to be engineered in our global markets going forward. So now let's move to Geng, who, who will present the current situation in a quickly evolving financial markets. It also give you information on the US financial outlook for 2020. It thank you very much, Lee. Hello everyone. The US financial markets experienced a dramatic stress and recovery this year. In the equity market in the S&P 500 index as shown in the top chart, was down by 31% on March 23rd. Since the beginning of the year. Then it'll bounce back that to be A2 by nearly 11%. On last Friday. Technology intensive NAS, that index was minus 24% on March 23rd. And then there's sort of two parts, the TV thirty-two percent. As of last Friday. The Rosseau index for small to US firms that was minus a 41% on March 18th. And then came back to be pulse DB2 for 4.5%. Last Friday, the bullet didn't index in which he said not as shown in the chart, spike into two a2 in March. And the man dropped all the way to 23. You buy less, afraid. Now incorporated market to tie the spread in the middle chart was 39 basis points at the beginning of the year. And this is the bread and measures to the creditor premium in the short-term borrowing cost. It Ajahn budget to 142 basis points in March and a man came down to better to 11 points by loss, the framing for long-term borrowing cost, we sell the credit premiums of the triple a rated bond to jump from fake teeth, three basis points to 235 basis points. The name ease to achieve. Six basis points. The Bay last Friday, the premium of a baker lady of high yield bonds jump from 3.56% to 10.87% and, and then come down to 4.2%. In treasury bonds market at the ten year yield, the remains below 1% since March, as shown in the blue or by the blue or lie in the bottom chart. They agree lying issues at the two-year yield. The spread between the two year. It's a narrow the Toward Zero, we march and then white. Then afterwards, economists interpreted the white, the positive bread as a market signal of future economic grooms. Apparently that'll mean the enlarge any comments you don't expect, the don't have a good expectation about the economy grows. The break-even rate was 1.8% at the start of the year. And at this rate, it's interpreted as the market expectation of a long-term inflation in a job or to a 0.5% in March and came back. The regional level to early September. Well, all of these up here to indicate the affordable recovery of the financial markets. It's a V-shaped recovery is remarkable. And perhaps to puzzling because the economies is still far away from being recovered. To understand this, a dramatic rebound NDA to forecast the market next year, we must through review the three new factors that currently dominate the financial markets. Next slide, please. With the first new factor is of course a coronavirus that impacts different sectors of the industry very differently. The top chart shows the year-to-date returns in different sectors. On Friday prior to the phi is roots at first announcement of is to back scene and results. Clearly, this append them equal rewards, communication and online shopping and a hammers travel services and energy. On the bright side, this pandemic exerts a powerful force on technological and pharmaceutical innovations. The second a new factor it is, it is dig, stream uncertainty about the path of recovery. We don't know whether the industry will recover to o the business or has to recover to new business. And the trajectory literally depends on the development of a vaccine. The recent news about the exciting progress on vaccine gave people hope to resume some of the good old, good old, like this has a completely different impacts on different sectors in the middle, recharged shoes at the secular returns, the sentence says the Pfizer and Max Maxime news. This a Charlie is almost of leap of the top chart. In addition, the pandemic coincides with the political uncertainty over contest, re-election, which has a implications to future physical policy, tax and regulation. That's 30 new factor is a B to, to draw the dairy monetary policy and a physical stimulus that we see this year. Besides cutting overnight interest rates to 0, the Fed has been purchasing $120 billion of assets. Every Mth net. Breaking from me to tradition, the Fed bought a corporate securities in the summer to push up at the corporate bond price. It even lens to forums that, that array. The Fed has an increase. It is a balance sheet from all $4 trillion to $7 trillion this year, as shown by the blue line in the bottom chart. These activities completely distort the pricing, indict the market. They impact the physical policy is also important. The Congress passed the $2 trillion cares act to stimulate the economy by giving loans to both large and small firms that are hammered by cope with physical stimulus sent the national that above 100% of GDP, as shown by the yellow line in the bottom chart. It is unclear how much influence, how much influence that the stimulus has on the pricing of debt and equity. And nobody has a clue. The existing analytics to do not to have placeholders for these new dominant factors. With this background, we are here to do our best to forecast financial markets nights a year. Looking back at the history of financial markets, I favor this the most difficult time to make a forecast. Next slide, please. After summer research. And we do see some strong upside a momentum. First with the US firms, the ability to adapt and to innovate. And I really impressive, even though the government failed to deliver additional stimulus in the third quarter, that GDP grew by 33% at annualized rate. As the top chart shows. Ma, This is shown by the top charter from the EPA. Okay, in the same quarter, 165 IPOs were added to the stock exchanges. And also by the same time, new business applications this year were up by 38% compared to last year. All of these shoes at the how the resilience of the US businesses, the ability to adapt and to innovate. And today's Wall Street Journal has an egg excellent front page article. And that, that describes how new entrepreneurs emerge from the wreck of cope with the economy. Second, and the acceleration of vaccine development. The very strong dose of optimism, even if we don't set the delivery and distribution issues dealt with the Mac flexing next year. Just progress in these areas may keep the markets. Because financial markets are forward-looking and financial market will be happy to see there is the end of this pandemic. Third, with the continuous support by both the fed and the government, we expect the low borrowing costs and the additional physical stimulus. The Fed has promised to keep interest rates at 0 until 2023. The federal chairman recently even signal that the Fed is willing to expand asset purchases if a long-term interest rates jump unexpectedly. In the meantime, politicians seem all agree that some additional fiscal stimulus unnecessary or they will continue to fight over its size and its distribution. Whether they are significant downside risks in the market. Of course, on top of the list is the risk of prolong the pandemic, any additional business, the restrictions, the recent lethargy infection, and the reinstate of the restrictions in some states in the recent days. And our, reminding us of this risk. Another important risk is the high valuation of equity. As the middle charter shoes at the PE ratio of S-box quickly climbed above 25. This year. The PE ratios of nasa stocks asks escalates 40 measly levels of a PE ratios that are unprecedented and cannot be justified by existing valuation model was seen 5X and s. By contrast, the creditor risk have very low premiums as I present to be in the first slice. And what, this is really income this than to wish the upward trend in corporate default rates. I is the shift in the bottom chart here. Another risk is the potential attacks and a regulation overhaul its favored by the incoming Biden administration. With all these upset momentum and at downside risks to the outlook of the financial markets this year a highly depends on the trajectory of Kuwait and the actions of the government and the central bank. While overall, we think there are reasons to expect the risk to be contained by the momentum, the upside of momentum. Well first, any further success in vaccine and achievement may increase the hope for us to co-exist with the wire is a peacefully. The industries, uh, ability to adapt any innovation may mitigate future is future shutdowns even before the vaccine stops the pandemic. Second, if the fat, it keeps interest rates low as they promise and continues to purchase assets and the injects more liquidity into the markets. The high valuation of equity and the low premium of credit risk or are likely to continue next year if they don't change and a propertied asset price onthe Clive's. Third, if we have divided our many in January. Second advocate an overhaul of taxation and regulation would be less likely. Although a divided government that reduces the chance of a large critical stimulus. But the industry is the ability to adapt and innovate may still carry the economy and the markets forward, like what we saw in the third quarter of this year. Therefore, Malo weeks back, the equity prices be Malmo tie or next year. But hiding up gender ready? Well, let me end my presentation. We said this a positive note, and I'll pass the torch to, right. Thank you. Thank you. I think about what we have experienced as a group over the past, say, 15 years. We've, if you go back even farther, go back to the turn of the century, we've really experienced three significant financial events in our lifetimes. The.com issue, the overvaluation of dot-coms that in many cases weren't even generating revenues at that point. As in you was talking, I was thinking about that. And then we moved on into the Great Recession, where we experienced a financial catastrophe within the banking system worldwide. And we learned some lessons there and we use some tools of quantitative easing and an interest rate changes and adjustments that worked to some degree throughout the world. And now we're in this third event, which is exogenous to the economy, exogenous really to everyone. And, and we've been experiencing, you know, a coordinated effort between or among companies, governments, federal reserve bank and their peers throughout the world. And it's really been pretty marvelous to watch the pretty fantastic results that they've achieved collectively. So with that, I will begin my presentation about the state of Indiana. And like the world and the United States, Indiana continues to recover from the pandemic, which did hit North America like a tsunami, very different from the Great Recession in March this year. As the waves of infection continue to move through our economy, various geographic locations in various industries have been affected at different times, in different ways and to different degrees. Hardest hit have been locations and industries reliant upon significant population densities, such as large cities and businesses and properties located their travel destinations, particularly requiring airline flights, hotels, restaurants, bars, churches, sporting events and other places people gathered together. Yet while the first wave moved through these areas, it has reached the cradle of good manufacturing and production home to Indiana. While services, especially small services companies like barbershops in dentist offices are most subject to failure and furloughs. Manufacturers are also feeling the pain among businesses in manufacturing and assembly hardest hit are smaller firms more likely to capsize even while the life preservers of cares ACT funds are set to expire. Now, some background of Indiana as an economic center. Indiana is the nation's most prolific manufacturing goods. It producing state, generating about 17% of GSP for manufacturing and additional 22% of GSP from goods production or nearly 40% of its total output for making things. Some might think of Michigan, Ohio, Pennsylvania, Wisconsin, Louisiana, or even Texas. Yet Indiana leads this pack because we make things in Indiana, we tend to contract sharply in the early stages of a recession, and we expand quickly in the early stages of recovery. For instance, in the second quarter of 2020, while the US fell in output by a record amount annualized 31.4%. The Hoosier State fell by an unprecedented thirty-three percent, resulting in output losses of more than $31 billion. We've experienced recovery to some degree since then. As the pandemic unabated, somewhat during warmer summer weather and interactive restrictions were lifted at that time. For instance, during peak employment pre pandemic times in Indiana throughout 2019 and up through 2020 in February, we held about 3.17 million jobs. Very tight labor market in the state of Indiana, and certainly down here into Boy County. At the height of the lockdown, Indiana had lost well over 400 thousand jobs. We've recovered nearly 300 thousand of them and now we're just over 3 million jobs in the state. Yet we've remained behind when we compare ourselves to pretend emic levels is we do not yet have numbers for output about the third quarter. The exact measure of the rebound today remains unclear, although we do know that we're still down and total output from pre pandemic levels. Currently COBIT 19 confirmed cases, hospitalizations and deaths are spiking again. Here and across the Northern Hemisphere is we brace for cold weather. A time when general coronaviruses are known to oftentimes proliferate. So why did we experienced the sharp economic contraction from the coronavirus? Why was it different than the Great Recession in its form and its, in its pattern? We self-directed this exogenous shock to gatherings, work, family, sports, social, and other groups were prohibited. We locked down to flatten the curve. We intentionally shut the economy down to help mitigate the effects of the virus. The economic damage thus far has been swift indeed. Quite unlike the damage wrought by the Great Recession, it sounds like a simple thing. Shut the economy down and when the virus is reasonably contained, started back up again. Yet it's not so simple. The time lag between shutting down and firing backup, in particular, in certain industries, such as transportation, airlines, hospitality, and leisure. The effects result in permanent damage. Jobs and businesses lost in former members of the labor market, oftentimes left behind. We had to do it. Our healthcare system may have been overwhelmed without it. And we're currently experiencing capacity issues in our healthcare system now during this current virus spike. Yet because we now nine months forward for March first, know more about the virus therapeutics vaccines and the way the virus spreads or does not spread, it is less likely we will need to entirely shut down again. However, with the virus spiking and a new administration set to begin work in January. The option does remain on the table. In fact, as was previously noted, many European countries, for instance, Austria, Germany and France and American states, for instance, New Jersey, Michigan, and Washington State, among others, have begun new rounds of targeted lock downs. My best estimate is we will generally utilize other forms of virus controls such as masks, ventilation and distancing to avoid full-scale shut downs. However, this does not, this does not mean people will go about activities like in the pre pandemic days, they will likely not. It also is unclear whether we will experience more full-scale shutdowns or not. I'll get to who suffers and who benefits from this in a moment. But next, I want to discuss the Indiana labor market. There are two components to the labor market, the unemployment and the labor force participation. I'll discuss each in turn, the unemployment rate in Indiana spike to 17.5% in April. The US rates spiked to 14.7%. Large metro areas and vacation travel destination spike the hardest. For instance, Detroit got all the way up to 24% unemployment in April, and Hawaii remains at 13% unemployment. Now at the last reading. By contrast, cities throughout indiana have recovered better in unemployment is now at 6.2% across the state as a whole. Again, this beats the US unemployment rate, which stands at 6.9%. Dubois counting as a significant producer of food and protein benefits from a more defensive, stable economy. And the current unemployment rate here stands at 3.8%, even better. The second measure of health in labor markets is the labor force participation rate, which describes the percentage of adults either working or seeking work in a given geographical region. Lftr, as we call it as a calculation, kicks adults out of the unemployment equation when they've begun seeking work for more than three months. So after they've been seeking work for three months, they're no longer counted in the unemployment rate, which tends to drive the unemployment rate down. But it doesn't help the labor market. Thus ostensibly we could end up with a low unemployment rate and a low LFTR, which would not be good. Rather, what we would want would be a low unemployment rate and a high labor force participation rate. The LFP are in Indiana was reduced by the great recession, which harm the labor market considerably. The LFP are reached a post recession rate of 65.1%. By 2016 to 2018. It's down to about 63% right now. And the all-time peak in Indiana was reached in 1995 before the.com crash and before the great recession, and that was 71.1%. So each of these events tends to harm the labor market in Indiana. When the unemployment rate and the LFP are considered together, losses across the state of Indiana since the peak labor market of 2018 have resulted in the elimination of over a 100 thousand workers of the IES. About 70 thousand have been lost during the current pandemic of 20-20. Nonetheless, Indiana as a relatively light leisure and travel state and a relatively heavy manufacturing goods production state fairs well versus neighboring states and pure states. As far as population growth as a means to enhance the labor market, Indiana has grown the past ten years during the longest expansionary period on record, by 3.8% to a level of 6.7 million. Total citizens in Indiana. More defensive, agricultural centered Dubois counting has grown over the same ten-year period by only 2% to a level of 42,700, although it is more stable than Indiana. Next slide please. Industries that were initially affected include travel oriented businesses including airlines, hotels, and restaurants. I think that's been well documented throughout these and other discussions that you may have heard. Manufacturing was also hit hard a month or so later, but only about half as hard. Industries across Indiana, including leisure, hospitality, manufacturing, goods production, education, and healthcare. Retail have rebounded somewhat. Yet they've all suffered cumulative total 3.3 to 5% losses since March. Of these manufacturing losses accounts for half of them with 50 thousand jobs lost. Additional losses will depend upon our continued responses to the virus, therapies, behaviors, vaccines, and national debt increases notwithstanding additional fiscal stimulus. Next slide, please. The last quarter of 2020, in the first quarter of 2021 will likely include output interruptions or attenuations avoidance of which is largely dependent on additional fiscal stimulus, as well as effectively developed and distributed therapeutics and vaccines. As our collective wisdom as to how to defeat the virus continues to improve, the last half of 2021 will likely show improvements to output and perhaps to a lesser extent in the labor markets. A while ago I hinted at who will likely suffer and be rewarded as we move forward, we'll who will suffer? Big cities, major sporting organizations reliant on large, densely populated events, socially oriented services like salons, Dennis doctors and others performing preventive care, optional care, or elective services will suffer. These businesses will suffer relatively more. Until the pandemic lives. Sadly, low wage earners will suffer more than higher wage earners because service jobs will continue to be disproportionately affected. And these workers will be more at risk to furlough or unemployment who will benefit places of business with less population density. Small and mid-size cities, rural communities, automotive companies, which benefit because public transportation is less in favor as it results in challenges to social distancing. Also, businesses able to continue to capitalize from the use of technology will be able to survive longer and may shape trends going forward. Indiana stands to benefit from some of these trends currently set in motion as a state with smaller, less densely populated cities and with a large presence in automotive and pharmaceutical development. Indiana stands to benefit from its manufacturing culture that could benefit from reshoring jobs as well. Also, we might benefit from population gains arising from migration away from large Midwest cities such as Detroit and particularly Chicago. Not sure this would benefit jasper, but it might. The outlook for Indiana is that this coming winter right now. And for the coming four or five months looks to be the challenge. We need targeted fiscal stimulus to help small businesses and furloughed individuals survive and transition beyond the pandemic. Although this is not a guarantee. This outlook is contingent on continued good news of vaccine development and plans for effective distribution. Even so, even with vaccine continuing to have good news there, the last quarter of 2020 and the first several months of 2021 will likely be difficult as we move to get these vaccines finalized and effectively distributed. The latter part of 21 should yield strong growth opportunity for Indiana in terms of output and jobs with manufacturing leading away. As I'm sanguine, we're poised to experience strong growth in course 34. Thank you very much and I'll now turn the program back over to Dr. IT Kasner for additional thoughts and questions and answers. You, Ryan, and thanks to all of our panelists, we did have a couple questions come in, so I'd like to pass those to the panelists. I'm going to start with Ellie MFI crap. The question was, is a successful and mass-produced vaccine included in the national and international economic output estimates. And if so, what timeframe are you anticipating for the impact of the vaccine? Yes. Thank you. The the baseline projection that we have here at the IDRC assumes that social distancing will continue into 2021 and subsequently will start fading over time as the vaccine coverage expand and the therapy improve. So in our model, we assume that the virus will be, the transmission will be brought to low levels by the end of 21-22. But that said, if the vaccine is available sooner than the activity will return more rapidly to put pandemic activity. Thank you. The next question is for you. The question is you mentioned tax rates and regulation are part of the unknown risks that could occur under a Biden administration. What sectors do you believe are most at risk for extra regulation? And what impact will the Senate run-off election results have? These are the runoff result in georgia. What impact they have on the rest? Great question. Yeah. For recommendation. I think the most impact can be up at the finite seen that straight at a banking industry. And that this Eric, I actually did a little bit company, Kay, did it. And that because mostly the Trump administration tried to rewind the macho dot frank and the bank regulation. But in most of the regulations that are already in there. And when they wanted to, Titan II said we're all like a capital requirement and that's the one thing they want to tighten further and that there are something. Another one is the most important one is the Volcker Rule that prohibit banks to cheat and to do speculative retreat and having that distinguish whether you'll treat aids for protection of the costumer or service costs, or actually sort of investment for bank at impractically, since you've really, really hard to distinguish them, but they have to document and make a lot of documentation to support it. And that's where the finance industry viewed as big burden. And been a, that's one that I want to go back. But on the other hand, there is another one like a fiduciary responsibility, fiduciary rule that a records that the financial advisers to to put at the customer interests first. And so and if you are compensated based on commission instead of fees, and they don't want to turn our day. And it doesn't need to go through Congress or Senate that she can do it. And so that's really a reschedule. Think hard. And, and he said, well, the intuition Getty end and they will to do it through the Commerce Department and change rule. However, and I don't think that our FAQ financing that street that heavily because the financing the strip pretty much already adjusted to them to the new regulation, assuming it wouldn't be there to Samsung, they don't like it. So most of the financial advising businesses already sweet goofy bass and instead of me away from a commission. So that can complicate the picture. Or tax rates. I'm talking about a risk of for corporate tax because it damages one to two and a reverse protects card. The one-on-one reverse back to the original thirty-five percent statuary texts and the data will affect all business. And the tech Scott to creat a huge run-up of marketing and a huge hit. And I said, Abide back. In 2018, and that's the risk I'll talk about that it needs, it goes through the Senate. And that's why descended the election is very important for it. And I think if you sort them by risk that I'm talking about, my mind getting you. We have a question about you explain why Indian is more sensitive to economic recession and the manufacturing base we have here compared to the rest of the country as a whole, what can Indiana do to improve on this? In other words, addressed since the extra sensitivity we have. Thank you. That's a good question. I think for many years, Indiana has been a laggard in educational attainment at the higher educational level, we rank in the forties in terms of higher educational attainment. We have gone all in on manufacturing and we have a strong culture in manufacturing and a great footprint. It might benefit us right now, I think it will, as the world looks to move its supply chain with what happened with the pandemic. And I think Indiana could be a benefactor in terms of reshoring of jobs and businesses in the manufacturing industry sector. But for the long run, I think what Indiana needs to do to move away from it's cyclical positioning is to develop more intensive structure for job readiness at the higher educational level. If we continue to invest more in our, in our children and get them on the track to college. I think the Indiana can benefit in different sectors that are more service-oriented. And as we move forward in probably five years out, I think this will help indiana more. It'll also rages go up as well. Sorry about that. That's true and genuine. We have one more question for you. I'm going to use the combined question. The question that was submitted is, can you talk about growth value disparity in 20-20 and whether it will continue or reverse in 2021. And if you might, there are a lot of listeners. I'm also, so this was the growth value disparity. But there are a lot of listeners who are wondering what they need to do to protect their 401K is in 2021. Can you speak to that as well? Yes. But I'd be very happy to. And it's a great question. It's a challenging question. And nobody knows the has, the has a magic recipe and to, to make you save and as you get higher returns, if we wanted to save will put me in a cache and I'll what I'll work boldface, x2, et cetera. How to deal with your wild, That the best, the waves don't lose money. Well, I'd better use of this. And so actually, yes, and this year we see the growth stock and perform well. Burwell values, the hammered. But what happened is that girls tend to be those that are looking for new opportunities, that technology start, that candidates are less economically sensitive or value stocks tend to be more economical missense team we turn out to be in this category. That's why we have have see this. But a recently, yes, a recent days we see value stocks come back since the vaccine use and a lot of people say that we should adjust. And yes, it may reverse may not. As I said in my presentation. Really depends on the trajectory and whether we really have to adjust to the new normal. And mostly, or we could review much of the old life or in the recent them. As I see a show you that they eat. The returns of crossing industry basically distance the vaccine and the better the uncertainty we face in terms of portfolios for 401K retirement. How to predict bad analysts do get returns, and they're still the best ways. I think the number one is that the older rule, diversify, diversify. And I'm not talking, but there's some new content there. I'm not talking about every swipe course bong. And equity. People were seeing diverse by about of a 60 equity and I'll put an SP and 40 bug. And I personally think a bomb is bad. In abandons the overvalued, your little upside there. Inches are hard to go down. What? Go? Hard to go down. If it's go up, you're going to loose money, bird limited upside. If you want to state about the rather say, go to inflation protected bonds. Because then when you inflation go out about price go, when you have an inflation kick it up. You can get there. And yet the summer from April to August, they are huge inflation premium but to go up. And so if you hold inflation protected to perform while we're doing that period, and I hand is really diversify across industry. That's the key. You don't want to read it, put it just a value or just gross and adjust as technology. And you really, you don't know which path it would be. Diversify across industry is number one rule. I'm going to do one more thing to if you want to build a portfolio and not put more weight on that dividend, paying stocks at that attend to weathered uncertainty better. Okay, that's another advice and Lasser device and a lot of portfolio don't offer that up. I use fidelity doesn't offer that upon a some retirement of our for that they the sort of the equity link, the notes which protective principle, but it gave your oxide. And that's essentially equivalent to taking using derivative securities to protected portfolio, but you still get exposure upside. But he did do it. It was it derivative, real shelf? It's accompany KU did and it's the cause to me an IV we your retirement portfolio offer that brought that. I'll recommend. It's good to take care that might otherwise. Your environment. I know we're out of time, so Christian, I want to turn it back over to you and I know you have a few concluding remarks. Thank you so much. Thank you, everyone for attending today and for your questions. Thank you again to our expert panel and our moderator for sharing Insights and our future. We'd also like to thank our sponsors one more time. Include our bowl sponsors of German American Bank, Eagle crest financial, Kimball electronics, wi t z, w q k z. Old national bank can send a whack with Merrill Lynch and W BDC, WJ T, S. Also, thanks to our bear sponsors of Jasper group, freedom bank, OFF S, master brand cabinets, springs Valley Bank and Trust, and the city of Jasper. Thank you all and have a great rest year week.