Indiana's labor market strength was unchallenged in the first two months of 2023. February's unemployment rate was 3.1 percent in preliminary Federal data released Tuesday, marking a third consecutive month at that almost-historic low.
Those rates can make it harder for companies to borrow money, leading them to start downsizing, slowing production, freezing hiring and potentially laying people off. The hope is that’ll reduce demand on the global supply chain and bring down the sky-high prices for basic goods.
But, economists and Reserve Chair Jerome Powell himself have warned that may be a recipe for a recession that would spike job losses, particularly in manufacturing. Indiana has a lot of workers to lose in that sector, so the state would likely be hit extra hard by such a recession.
There were Reserve rate increases in December and February and several hundred layoffs across the state – mostly from northern Indiana manufacturers. U.S. Steel, for example, laid off 244 workers in January as part of its “indefinite idling” of a Gary tin plant “due to market conditions which were out of the Company’s control, including the continuing reduced demand for the Company’s tin products and significantly increased tin mill imports.”
And yet, preliminary data show the state and most regions within it still had low unemployment, a near-historic high number of people working and a lot of jobs to fill.
There were five job seekers for every 10 open positions in January, according to the latest Bureau of Labor Statistics’ Job Openings And Labor Turnover Survey (JOLTS) data.
A similar, stagnant and tight labor market across many U.S. states have made some experts and officials more optimistic on the future – though, many note this is a unique situation and a lot of uncertainty and risk remains.
One exception to the state’s stagnantly-tight labor market: the Elkhart-Goshen metro. The northern Indiana manufacturing hub’s unemployment rate spiked in January to 4.9 percent, becoming the region’s highest rate for that month since 2015.
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The metro had about 72,600 manufacturing jobs in Feb. 2023. That’s a 5.3 percent decrease from Feb. 2022’s 76,700 estimated jobs – a peak level of employment for the last decade. The region also saw negative 12-month changes in overall employment, professional and business services and government jobs.
The state as a whole only had positive 12-month changes across all major sectors in February, though the growth in manufacturing jobs was lower than in past months.
These estimates are not seasonally adjusted, meaning it doesn’t account for the natural ups and downs of the labor market that come with any part of the year – like seasonal jobs that only exist in the summer. That means the Elkhart-Goshen metro’s 4.9 percent unemployment rate for January can’t be compared to the metro’s December rate or to the seasonally adjusted statewide rate of 3.1 percent. But it can be compared to every January in prior years.
JOLTS and metro unemployment estimates come out two months after the fact, unlike the data that includes the statewide unemployment rate or the industry-specific metro data. Those comes out one month later. In all these data sets, each month’s release is preliminary, meaning it might be adjusted up or down during the following month’s release.