State’s unemployment report for March doesn’t reflect surge in jobless claims

Indiana announced Friday that the state’s unemployment rate for March had ticked up to 3.2%—but with a huge caveat that the data is based on a survey taken just before an immense surge in unemployment claims due to the coronavirus crisis.

“Important note: Most of this information was from a survey conducted on March 12, 2020,” according to a heading at the top of the report from the Indiana Department of Workforce Development.

The data predates a sudden swell of initial jobless claims in Indiana filed for the week ended March 21. They rose to a whopping 61,635, up from 2,596 claims the previous week.

Federal statistics released Thursday show the number of people who have lost jobs in Indiana during the coronavirus outbreak has grown to at least 444,000.

In effect, the state’s March employment report provides a snapshot of the state’s job market just prior to government efforts to contain the spread of the virus by throttling entire industry sectors and mandating that most consumers stay home except for “essential” work and travel.

“The unemployment report clearly does not reflect current conditions,” said Scott Olson, IDWD’s media director, on Friday.

The state traditionally bases its monthly unemployment report on a U.S. Department of Labor survey that covers the first half of the previous month and the second half of the month prior—“in this case, mid-February to mid-March,” Olson said.

“The week of the survey is the week containing the 12^th day of the month, in this case, March 12,” he said.

The Indiana report shows that the state’s unemployment rate had inched up from 3.1% in February to 3.2% at the time of the survey in March.

Still, there was evidence of a brewing shift in what had been near-record employment levels in Indiana.

Indiana’s labor force—which is composed of both employed and unemployed-but-willing-to-work residents—shrank by 119,073 workers from February to March, dropping from 3.39 million to 3.27 million.

Indiana’s labor-force participation rate—the percentage of the state’s population that is either employed or actively seeking work—decreased from 64.4% in February to 62.2% in March. It remained ahead of the national rate of 62.7%.

Private sector employment in Indiana slid by 17,800 workers over the previous month, the state said. Total private employment was 2,727,300, which was 22,000 below the January 2019 peak.

The decrease was due in large part to losses in Leisure and Hospitality sector (-7,400), Trade Transportation and Utilities (-4,200) and manufacturing (-2,600).

The unemployment rate in Indiana for March was lower than the rates in neighboring states Michigan (4.1%), Illinois (4.6%), Ohio (5.5%) and Kentucky (5.8%).

The unemployment rate for the United States shot up to 4.4% in March from 3.5% in February. That is expected to change significantly when figures for April are compiled, due to a surge in layoffs as business activity in many sectors slows to a near standstill.

Efforts to contain the spread of the coronavirus have all but eliminated the ability to gather in groups in many states, either socially or professionally. That has gutted employment in sectors including food service, travel, manufacturing and hospitality.

Indiana Gov. Eric Holcomb on March 12 issued recommendations for limiting large gatherings of people in professional and social settings. On March 16. he issued an order that restaurants discontinue on-premises dining. On March 23, he ordered residents to stay at home through April 6, except those performing essential work or certain permitted activities. That deadline has since been extended to April 20, and likely will be extended again.

About 22 million Americans have applied for unemployment benefits in the last month. Filings for unemployment aid generally reflect the pace of layoffs.

As job losses mount, some economists say the nation’s unemployment rate could approach double digits by May. By comparison, the highest jobless rate during the Great Recession, which ended in 2009, was 10%.