INDIANAPOLIS — Indiana’s unemployment rate rose slightly in May to 4.0%, but continues to stay ahead of the national rate, which was 5.8% for the month.
Indiana's unemployment rate rose 0.1% from the previous month and equalled its March level. However, it continues to be well below the early COVID-19 pandemic levels. In April 2020, Indiana saw the brunt of COVID-19 shutdowns that prompted mass layoffs, resulting in an unemployment rate of 17.5%. May 2021's 4% is well below May 2020's 12% as the unemployment rate started to steadily climb back down as economic activity resumed.
The state's monthly unemployment rate released Wednesday by the U.S. Bureau of Labor Statistics reflects the number of unemployed people seeking employment within the prior four weeks as a percentage of the labor force.
Indiana’s labor force had a net increase of 6,370 over the previous month. The bureau attributed to this to an increase of 3,292 unemployed residents and an increase of 3,078 employed residents.
Indiana's total labor force, which includes both Hoosiers employed and those seeking employment, stands at 3.34 million, and the state’s 63.2% labor force participation rate remains above the national rate of 61.6%.
Next month's figures may reflect the effect of Indiana ending June 19 its participation in all federally funded pandemic unemployment insurance programs. That could show more people resuming the search for work.
"There is some concern that extra unemployment insurance benefits of $300 per week are leading some potential workers to turn down low-paying opportunities, leading to labor shortages in some industries and weighing on job growth," said PNC Chief Economist Gus Faucher of the national picture.
Over the next month, about half of states will have stopped the extra benefits, Faucher said.
"Other reasons that the unemployed might not be taking available jobs include concerns over contracting COVID and the need to care for children who are schooling at home because of the pandemic," he said.
Some statistics show that 45.8% of the U.S. population is fully vaccinated, with many retailers no longer requiring customers to wear masks.
With regards to the unemployment rate, the state continues to fare well compared to its Midwestern neighbors, with May's rate tying with Minnesota; only Wisconsin fared better at 3.9%. That state saw no change from the previous month. Ohio also saw an increase in its unemployment rate, going up 0.3% to 5%, where it tied with Michigan, which saw a 0.1% increase. However, the Wolverine State has seen the biggest yearly drop in unemployment of 15.8% because of its May 2020 rate of 20.8%. Illinois saw no change in its 7.1% rate, while Kentucky saw a 0.2% decrease to 4.5%.
Employment by sector
Private sector employment in Indiana has increased by 234,800 over the year and decreased by 2,700 over the previous month. The monthly decrease is primarily due to losses in the Manufacturing (-3,600) and the Trade, Transportation and Utilities (-700) sectors. Losses were offset by gains in the Leisure and Hospitality (1,900) and the Construction (400) sectors. Total private employment stands at 2,620,800, which is 119,700 below the December 2019 peak.
May employment data for Indiana counties, cities and MSAs are expected to be available at noon Thursday.
Last month, for the first time in a year, unemployment statistics had returned to prepandemic, full-employment levels — with LaGrange County at 2.3% unemployment in April.
LaGrange County, which relies heavily on tourism, measured 32.7% in its first pandemic unemployment rate, the worst in the region.
There were 5,766 people unemployed in LaGrange in April 2020 compared to 447 in April 2021.
Allen County’s unemployment improved to 4.2% in April compared to 4.5% in March. A year ago in April unemployment hit 19.5% compared to 3.6% in March 2020.