Indiana unemployment rate plunges by 0.4 percent

2014-03-17T12:30:00Z 2014-03-18T06:49:07Z Indiana unemployment rate plunges by 0.4 percentJoseph S. Pete, (219) 933-3316

In January, the state's unemployment rate dropped to the lowest level since 2008, but joblessness rose month-to-month in winter storm-battered Northwest Indiana.

Indiana's seasonally adjusted unemployment rate fell by 0.4 percentage points to 6.4 percent in January, dipping lower than the national rate for the first time since June 2012. The national rate was 6.6 percent in January.

"Every Hoosier should be encouraged by today's unemployment numbers, which show the largest one-month drop in unemployment in 20 years," Gov. Mike Pence said. "Indiana's rate is now lower than the national average, and our labor force and population continue to grow."

The state's unemployment rate improved in January not because of any increase in hiring but because of a drop in layoffs and a seasonal contraction in the size of the workforce, or the number of people who are employed or actively looking for work. The state's workforce shrunk by 3.4 percent in January, according to Indiana Department of Workforce Development data. Initial claims for unemployment insurance benefits were 6,000 less than in January 2013.

Indiana, however, lost 7,100 private sector jobs because of the harsh winter, despite gaining 4,600 new jobs in the rebounding manufacturing industry. Total non-farm employment across the state fell by 10,000 jobs because of large declines in the transportation, construction and educational and health services sectors.

"While others may gush about 'the largest one-month drop in unemployment in 20 years,' I look at the report and find myself wondering many things," said Indiana House Democratic Leader Scott Pelath. "In December 2013, the number of Hoosiers who were employed is listed at 2,960,003 and the numbers of unemployed are 200,694. In January 2014, the numbers of employed Hoosiers are listed at 2,950,298, and the numbers of unemployed at 209,305... These disparities only serve to heighten the concern that many of us have about the so-called 'job creation' engine that the governor, his administration, and his super-majorities like to tout so often. What is so worrisome is that we may talk about unemployment percentages going down, but they are not going down as much as the continued 10-year decline in the household incomes of Hoosiers."

Unemployment rose locally. In the Gary metro area, the jobless rate increased to 8.4 percent in January, up from 8 percent in December. Despite the month-over-month increase, unemployment in Lake, Porter, Jasper and Newton counties was still down significantly from the 10.1 percent it had been at in January 2013.

The jobless rate showed an even more dramatic year-over-year improvement in the Michigan City metro, where it fell to 9 percent in January, as compared to 11.3 percent in January 2013. The rate in LaPorte County however jumped 0.6 percentage points in January, up from 8.4 percent in December.

"There are many positives to note this month," said Scott Sanders, commissioner of the Indiana Department of Workforce Development. "Indiana's unemployment rate is not only lower than our neighboring states, but the national rate as well."

Indiana gained an estimated 50,800 private sector jobs last year, according to U.S. Bureau of Labor Statistics data.

In January, unemployment rates stayed steady or increased in every major Northwest Indiana city and town, except for Valparaiso, where it fell to 6 percent, as compared to 6.1 percent in December, and Gary, where it dropped to 10.9 percent, down from 11.4 percent the month prior.

East Chicago, Gary, Hobart and Michigan City had the highest joblessness rates in the state. They were the only cities in Indiana that still suffer from double-digit unemployment.

"Amidst this good news, we know that unemployment numbers are not a complete measure of the health of the economy," Pence said. "Too many Hoosiers are still struggling, which is why we need to continue pushing to improve Indiana’s economic climate, to attract more jobs, and to make sure Hoosier workers have the skills they need for the jobs of the future."

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