Over 80 percent of the world’s recreational vehicle (RV) production occurs in or near Elkhart, IN, so it’s no wonder that, for decades, Elkhart has been known as the RV capital of the world.1 Thanks in part to RVs, Elkhart’s unemployment rate was comfortably below the national rate in 2007—but then RV sales plummeted two years in a row, a signal that American consumers could no longer afford high-ticket luxury goods.2 By the depths of the Great Recession in mid-2009, nearly one-fifth of Elkhart’s labor force was unemployed. However, Elkhart’s labor market quickly recovered, with unemployment declining to 2.3 percent in 2018, far lower than the national rate. Elkhart is at the center of a cyclically sensitive regional economy: When the nation does well, Elkhart does even better, but when the nation struggles, Elkhart does even worse. Although other metro areas experience similar swings, most metro areas do not swing as intensely.

This article appeared in the Fourth Quarter 2019 edition of Economic Insights. Download and read the full issue.

[1]See Hesselbart (2016).

[2]See RV Industry Association (2018).

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