COVID-19’s hit on Indiana’s hospitality, manufacturing and education and health sectors are mostly to blame for the state’s record April unemployment rate standing above the national average.
Indiana had a 16.9% unemployment rate for April, while the national rate was 14.7%, according to U.S. Bureau of Labor Statistics and Indiana Department of Workforce Development numbers released May 22.
“We went from full employment to record unemployment in less than 30 days,” Rachel Blakeman, director of the Purdue University Fort Wayne’s Community Research Institute, said in a news release. “This shouldn’t come as a surprise by now based on the volume of the weekly unemployment insurance claims. I am confident economists are going to be studying this period of time for decades to come. Since CRI focuses its work on Fort Wayne and northeast Indiana, I am particularly interested in how this plays out next week at the local level because we know that manufacturing has been hit hard locally. While I’m not going to estimate what we will see next week, we should be preparing for double-digit unemployment rates here since this region has been second only to Indianapolis for the number of initial unemployment claims.”
The Department of Workforce Development was releasing county-level April unemployment rates May 26.
“It is highly likely the regional April unemployment rate will, at the very least, surpass the highest monthly rate (13.0%) reached for northeast Indiana during the Great Recession,” Rick Farrant, director of communications for Northeast Indiana Works, said in the release. “The impact of this virus has coursed through every industry sector in northeast Indiana and upended the lives of many workers, especially those in manufacturing and in food and accommodations.”
Manufacturing represented 29% of all jobs in the 12 northeast Indiana counties based on the most recent data before COVID-19.
In the Midwest region, Michigan had the highest April unemployment rate of 22.7% using seasonally adjusted rates, putting it second only to Nevada’s 28.2%, Blakeman said. Indiana was in line with its eastern and western neighbors with Illinois at 16.4% and Ohio at 16.8%, she said.
Indiana’s labor force had a net decrease of 40,450 over the previous month. This was a result of an increase of 446,017 unemployed residents and a decrease of 486,467 employed residents.
Private sector employment decreased in April by 405,200 over the year and by 380,500 over the previous month. Most of that was attributed to losses in the leisure and hospitality (-116,000), the manufacturing (-78,200) and the private educational and health services (-54,200) sectors.
Indiana’s total labor force, which includes both Hoosiers employed and those seeking employment, stands at 3.23 million, and the state’s 61.4% labor force participation rate is above the national rate of 60.2%.
Indiana Gov. Eric Holcomb’s stay-at-home orders to slow the spread of COVID-19, which has killed nearly 2,000 Hoosiers and nearly 100,000 nationwide, shut nonessential businesses and set limitations on many others during all of April.
April’s state unemployment figure was 13.7% higher compared to March’s 3.2%. The April 2019 unemployment rate was 3.6%.
Holcomb’s restrictions went into place during the latter half of March, so that monthly figure didn’t reflect COVID-19’s effect as Hoosiers couldn’t eat in restaurants and worked from home, drastically lowering travel for leisure and business. The results were restaurants, hotels and other venues furloughing employees while some manufacturers found a way to keep employees busy by making personal protective equipment for health care workers, including cloth masks and plastic face shields.
Total private employment stands at 2.335 million, which is 414,000 below the January 2019 peak.
The monthly unemployment rate is a U.S. Bureau of Labor Statistics indicator that reflects the number of unemployed people seeking employment within the prior four weeks as a percentage of the labor force.
The unemployment rate historical data dates to 1976.