Indiana’s unemployment rate grew slightly in February to 9.4 percent, keeping the state’s jobless rate at the highest level since the recession of the early 1980s.
State figures released Friday show a slight decline in unemployment in northern Indiana’s hard-hit Elkhart County, where the jobless rate is nearly 20 percent. But one economist said those numbers aren’t the good news they appear to be.
February’s jobless report shows 324,000 Indiana residents looking for work — about 4,000 more than in January. That pushed the state’s jobless rate up slightly from January’s 9.3 percent.
Indiana’s preliminary, seasonally adjusted 9.4 percent jobless rate means February’s rate was the highest since January 1984, when rate was 9.6 percent and Ronald Reagan was president.
February’s numbers suggest that an increase in heavy construction jobs amid the lingering recession is starting to offset continued drops in auto manufacturing, said Teresa Voors, commissioner of the Indiana Department of Workforce Development.
“We expect to see continued growth as outdoor construction resumes, but this may not completely negate extended furloughs and layoffs in the automobile industry in the coming months,” Voors said.
Indiana’s 0.1 percentage-point February jobless increase was the smallest among it and neighboring states.
Illinois reported the largest increase, up 0.8 points to 8.6 percent. Ohio’s rose 0.6 points to 9.4 percent, while Kentucky’s climbed 0.5 points to 9.2 percent. Michigan’s rate climbed 0.4 points to 12.0 percent.
February’s national jobless rate was 8.1 percent.
Northern Indiana’s Elkhart County, which is reeling from job cuts and plant closures in the recreational vehicle industry, again had the state’s highest unemployment rate in February. Its jobless rate was 18.0 percent, down from January’s 18.3 percent.
That decline might seem positive, but not if one considers the data behind it, said Bill Witte, co-director of the Center for Econometric Model Research at Indiana University.
Although the number of Elkhart County residents deemed unemployed dropped by about 1,000 in February, the same month saw the county’s labor force fall by about 1,580 workers. And the county’s pool of employed workers dropped by about 600.
Witte said that means the county’s jobless rate drop reflects an increase in what the federal government calls “discouraged workers” — those who’ve stopped job hunting.
“It’s sort of a sign of the fact that things are so dismal some people have given up looking for work altogether. And some of them may have decided that prospects in Elkhart are so bad they’ve moved away,” he said. “They’re looking for work elsewhere.”
Elkhart County Commissioner Mike Yoder said he was surprised the unemployment rate had dropped slightly, saying he expected it to top 20 percent.
“That slight downward tick doesn’t really indicate a trend, but it does indicate maybe we’ve stabilized,” he said. “Perhaps as we get into the summer months, if people would just buy a few RVs, we might actually see that continue to go down.”
Yoder said that because of all the attention Elkhart County has received about its high unemployment — including a Feb. 9 visit by President Barack Obama — the county has had companies inquiring about opening businesses there.
He said the county is in talks with two companies that could each bring more than 200 jobs.
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Associated Press Writer Tom Coyne in South Bend, Ind., contributed to this report.
