Unemployment Up, But State Questions Numbers
Workforce Development office says reported drop in labor force looks odd
Indiana's unemployment rate jumped in July, but the state's department of workforce development doesn't necessarily believe all of the federal government's jobless numbers.
The jobless rate rose two-tenths of a percentage point to 8.2 percent last month even though the federal Bureau of Labor Statistics said almost 11,000 were created in Indiana in July. The rate rose because the government said that roughly 25,000 who were working in June dropped out of the labor force in July. It's the second consecutive month that number has dropped dramatically. "(The BLS has) shown that roughly 45,000 Hoosiers have gone from gainfully employed in the workforce to not just unemployed, (but) to not even looking for work. That'd be the equivalent of the entire population of the city of Anderson," said Joe Frank, spokesman for the Workforce Development department.
Frank says the department's commissioner, Scott Sanders, has spoken to the Bureau about it's estimates several times recently. "They believe that their model is correct. However, we've shown nine consecutive months of private sector job growth, and unfortunately, the survey numbers are just not matching up." Franks says they do not believe the federal government is intentionally distorting the numbers, but says state officials don't see how it is possible that Indiana has lost that many people from the labor force.
Ball State University economist Mike Hicks says this appears to be the latest problem with the government's statistical model, "the seasonal adjustment statistics that have been, to put it quite frankly, thrown out of whack by the major adjustments that have occurred in the Indiana economy and to the national economy over the past four or five years."
The seasonal adjustment is used to prevent wild swings in the jobless rate by adjusting for events that typically occur every year, such as young people taking and then quitting summer jobs or working over the Holiday season. Hicks says the economy has changed so much over the last four-to-five years, the statistical modesl used by the government may no longer be valid. "There's no real mathematical way to fix it until we have several good years of stability, and we're a long way from that. That's a problem that the federal government, at the Bureau of Labor Statistics, that they are well aware of."
Hicks says the most important statistic to him and most others is the job growth number, and Indiana continues to outpace the nation when it comes to job growth, especially in manufacturing.
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