The unemployment rate in Indiana rebounded dramatically in July, although the positive economic indicator was undermined by a drop in the state’s labor force.
Indiana’s unemployment rate dropped to 7.8% in July after three months in double digits—mostly recently 11.2% in June—according to numbers released Friday by the Indiana Department of Workforce Development.
The state unemployment rate for July also had improved to a far greater degree than the national unemployment rate of 10.2% for July. In June, the state rate of 11.2% was a tick higher than the national rate of 11.1%.
An estimated 258,598 Hoosiers are currently unemployed and seeking jobs, the state reported.
But Friday’s report also revealed significant decreases in the state’s labor force—which is composed of both employed and unemployed-but-willing-to-work residents—and in its labor-force participation rate—the percentage of the state’s population that is either employed or actively seeking work.
Indiana’s labor force decreased by a net 75,741 workers from June to July, dropping to 3.31 million. This was the result of a loss of 117,983 unemployed residents from the labor force because they had stopped looking for work, and an increase of 42,242 employed residents.
Indiana’s labor-force participation rate fell from 64.3% in June to 62.8% in July. It remained ahead of the national rate of 61.4%.
The labor force participation rate indicates the percentage of all people of working age who are employed or are actively seeking work.
Private sector employment in Indiana in July increased by 40,500 over the previous month but was down by 127,000 over the year. Total private employment was 2.6 million, which was 147,800 below the January 2019 peak.
The monthly increase was due in large part to job gains in the Leisure and Hospitality sector (23,100) and the Professional and Business services sector (11,100).
Friday’s report broke out unemployment rates for six nearby states, with Kentucky (5.7%), Wisconsin (7%) and Minnesota (7.7%) reporting lower rates than Indiana’s. Illinois (11.3%), Ohio (8.9%) and Michigan (8.7%) had higher rates.