Indiana's unemployment rate increases slightly in August, but labor market remains tight

Fashion retailer SHIEN announced plans to expand its warehouse operation in Whitestown, Indiana, bringing the potential of new jobs with it.

The expansion could bring around 1,000 new jobs to the area by 2023, according to a recent study from Indiana University's Kelley School of Business. 

That may add competition to an already tight labor market.

Indiana’s unemployment rate increased slightly in August to 2.8 percent. That’s according to new state-level employment data released by the federal Bureau of Labor Statistics.

The state’s unemployment rate is still near record lows for the last decade. It’s also below the national rate of 3.7 percent.

Not everyone who is unemployed lost a job, said Rachel Blakeman, director of the Community Research Institute at Purdue Fort Wayne. Some may be returning to the job market after time away.

This includes people who retired at the start of the pandemic who have changed their minds and starting looking again. Or, parents who didn’t have enough childcare to work until now.

“Sometimes we see people go from not engaged with the labor market to employed so they skip over the unemployed category,” Blakeman said.

An increase in unemployment and the state’s overall labor force gives employers that are struggling to hire an opportunity, Blakeman said, but the market is still tight.

“You now suddenly have some industries competing against other industries that we have not historically seen,” she said. “So especially locally owned restaurants find it very difficult to offer benefits in terms of health insurance, whereas your local Amazon warehouse definitely offers benefits.”

At 3,306,597, the preliminary number of employed Hoosiers in August is at a ten-year peak. The percent of working-age people in Indiana who have jobs or actively looking for work has been steadily around 63 percent for the last few months, beating the national average.

The Bureau of Labor Statistics also released new state-level Job Openings and Labor Turnover Survey (JOLTS) data on Friday. State JOLTS numbers come out two months after the fact, not one like BLS’ employment data. And each release provides a preliminary number that is finalized the month after.

So, new preliminary data for July show Indiana had about four job seekers for every 10 open positions.

“They may be playing the field,” Blakeman said. “They'd like to get the highest pay possible. Or maybe it's a benefits package or scheduling or who knows what it is. But there are reasons for people to actually be actively searching but not taking that first job, especially knowing that that first job may not be their best offer.”

The market gives workers more choices and more power for now, Blakeman said this could "come to a crashing halt."

"We just don't know when that is," he said. "And that's part of the reason why it's so important to get skills training because that can often be a buffer.”

The past few JOLTS data releases showed Indiana has a large number of employees quitting and relatively few layoffs. If that trend reverses, or a recession hits, Blakeman emphasized credentials and degrees can help workers stay in or quickly find employment.

Contact reporter Adam at arayes@wvpe.org or follow him on Twitter at @arayesIPB.