Unemployment for Hoosiers: Starting to Stabilize, Will It Continue?
March 14, 2023// PCRD
In a November 2021 report, PCRD posed the question of unemployment stabilizing. Now 1.5 years later trends are starting to form a result. To recap the previous report, PCRD analyzed all 92 Indiana counties’ unemployment rates. Then looked into the trends of these unemployment rates each month to see if they would rise or fall. The highest peak for the unemployment rate for all counties occurred in April 2020, when the COVID-19 pandemic was in the early stages and when the Hoosier labor force was starting to quarantine. With some counties reaching an unemployment rate as high as 32%. Then one year later in April 2021 those same counties that had high unemployment rates fell to about 8%.
At December end of 2022, Indiana had an unemployment rate of 2.4% So to answer the question of the November 2021 report, no unemployment did not stabilize. Indiana unemployment rates were not stabilizing with consistency of the unemployment rates, year over year. Roughly, the unemployment rate in 2020 was around 7.1% for Indiana. In 2021, 4.4% and 2022 the unemployment rate was 2.6%. It continues to drop by about half each year. In this report, we will look at the current trends of unemployment, as well as other factors (inflation, “Great Resignation”, and Job Postings) that are connected to such low levels of unemployment.
In 2022, unemployment rates fell as low as 1.3% in some counties. Nationwide unemployment fell to its lowest point for the previous 54 years, according to the U.S. Department of Commerce. Having low unemployment is generally deemed a good thing. However, with such extremely low levels of unemployment rates, inflation began to rise. The relationship between low unemployment rates and inflation can be tied together with the Phillips Curve, theorized by A.W. Phillips in 1958. The Phillips Curve explains that the lower the unemployment rate, the higher inflation will be. And this theory can be stated in the inverse as well, high unemployment rates mean low inflation. According to the 2022 Joint Economic Report, the United States’ inflation rate increased to a high of 8.5%. A tradeoff has occurred in Indiana and the United States with low unemployment rates and high inflation rates. Also, note that low unemployment rates do not factor in those who would deem themselves underemployed.
Along with low unemployment, a “Great Resignation” occurred within Indiana. In the later months of 2021, many Hoosiers’ businesses began losing their employees for a myriad of reasons. This continued into the year 2022. PCRD’s Dr. Lionel Beaulieu states the reasons people are quitting their jobs are wide-ranging and complicated. Dr. Beauliue reasons it can fall into these eight reasons:
- Persisting Concern with 2020 COVID-19 Pandemic
- Seeking Better Job Opportunities
- Choosing Work/Life Balance
- Experiencing Job Burnout
- Looking for Companies that Embrace a Culture of Caring
- Seeking Remote Work Options
- Opting for Early Retirement
- Starting Their Own Business
Unsurprisingly when low unemployment is in full force, as it was for Indiana in 2022, many businesses will have numerous job postings available.
Certain occupations in Indiana rise above others and have the most need when looking to fill positions. Rural Indiana Stats, provides data for the months between January 2021 and December 2022, 50 Indiana counties’ top job posting occupations were for registered nurses. 38 Indiana counties’ top job posting occupations were heavy and tractor-trailer truck drivers. Between these two occupations within Indiana, there were 187,346 unique postings.
In conclusion, low unemployment rates can be viewed as a good thing for any state. But it needs to be mentioned that some effects, good or bad, come into play with low unemployment. Stay tuned for upcoming PCRD blogs that continue to look at the data and how convey the information in a useful way.