13 WTHR - Indianapolis News |Indiana's jobless rate drops to 9.9 percent

Indiana's jobless rate drops to 9.9 percent

Rich Van Wyk/Eyewitness News

Indianapolis - Indiana is one of only four states to see a drop in its unemployment rate in August - but, for some reason, the numbers don't exactly make sense.

Unemployment fell below 10 percent in August, down to 9.9 - more than half a percentage point lower than July.

"It is a positive sign, but there is mixed data out there," said Rachel Smith, a business professor at the University of Indianapolis.

From workplaces to unemployment offices to homes, some of the numbers don't make much sense. Indiana employers say they have fewer jobs, but at the same time fewer Indiana families say they are looking for work. Surveys conducted by the Department of Workforce Development found 24,000 fewer unemployed Hoosiers, while businesses said they had 21,000 fewer employees.

Explanations for the contradictory numbers include: Students returning to school and leaving the workforce, frustrated jobless workers giving up their search and possible errors in the data.

"We don't have clear information as to whether this is actually a long-term trend, or just kind of a blip on the radar," Smith said.

Yet Smith sees a small but definite number of improvements. Auto and other manufacturers are recalling some laid-off workers, along with transportation and warehousing industries. Manpower says job placements last week were up seven percent from last year.

"Overall, they are testing the water and bringing people in with the hope they will keep them on permanently," said Manpower's Ramona Schaefer.

Nationwide, however, economists predict unemployment will increase before the recession is over.

From the Associated Press:

Indiana's unemployment rate dropped to 9.9 percent in August, but officials said it is too early to tell whether the decline marked the beginning of a long-awaited recovery.

Numbers released Friday by the Bureau of Labor Statistics show Indiana's jobless rate fell from 10.6 percent in July, putting it among just four states with measurable rate decreases over the month. More than 307,000 Indiana residents were looking for work in August, down from 332,000 in July.

"I don't know that people should break open the Champagne bottle at this point, but maybe buy a beer this weekend," said Carol Rogers, deputy director of the Indiana Business Research Center.

The August unemployment rate dropped as Indiana recorded fewer people working and a smaller labor force. That's a sign that people are giving up their job searches, retiring early, moving or otherwise leaving the work force, Rogers said.

"There is some small bit of light occurring there (in August numbers), but it's being overshadowed by people leaving the labor force," she said. "People have stopped looking."

The three other states with the largest drops in their monthly unemployment rates - Colorado, Kansas and Virginia - also experienced similar trends. None actually added any jobs.

The Indiana Department of Workforce Development said it's too early to say whether the decline is just a blip. Agency Commissioner Teresa Voors said key factors used to determine employment numbers appear to contradict each other, so it will be difficult to determine the significance of August figures until more data arrives.

"The next few months should provide evidence of a trend or a one-month survey anomaly," Voors said.

The Indiana Business Research Center, in fact, predicts that the state's unemployment rate could hit 11 percent before beginning a more permanent downward trend.

Elkhart County in northern Indiana, which has been hit hard by the collapse of recreational vehicle manufacturing, had the state's highest county jobless rate at 16 percent. That continued a steady decline in the county unemployment rate since its recent peak in March of 18.8 percent. County-level data is not seasonally adjusted as the statewide rate is.

Indiana's rate is below that of its neighbors. The August rate in Michigan was 15.2 percent, compared to 11.1 percent in Kentucky, 10.8 percent in Ohio and 10 percent in Illinois.

Indiana will get its next peek at the state's unemployment situation on Oct. 21, when September jobless numbers are released.

(Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.)