State down 6,000 private sector jobs

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October 19, 2012

State down 6,000 private sector jobs

Floyd, Clark see drops in unemployment despite payroll slowdown

By DANIEL SUDDEATH daniel.suddeath@newsandtribune.com The News and Tribune Fri Oct 19, 2012, 04:44 PM EDT

> SOUTHERN INDIANA — Indiana’s unemployment rate dropped slightly last month, but there was a decline in payrolls to the tune of about 2,600 jobs from August to September.

Overall, 6,000 private-sector jobs were lost over the month.

A U.S. Bureau of Labor Statistics study released Friday showed the state’s jobless mark dropped from 8.3 percent in August to 8.2 percent in September. But the manufacturing sector shed about 1,400 positions in Indiana from August to September, which fueled the decrease in payrolls.

“Absent strength in the auto industry, we would have likely seen greater declines,” said Uric Dufrene, Sanders Chair of the Indiana University Southeast School of Business.

Manufacturing in Indiana has been supported by strong sales in the automotive and related sectors, he continued.

“However, the slowing of the global economy and the overall slowing of manufacturing shows up in [Friday’s] report,” Dufrene said.

The professional and business services sector — one of the strongest sectors in Indiana following the recession — declined by 3,300 positions from August to September.

The educational and health services sector shed 2,600 payrolls over the month, according to the report. For the year, the state is still up more than 10,000 jobs compared to last year.

But Friday’s reported decline in payrolls “is somewhat significant given the progress made earlier this year,” Dufrene said.

As for gains, the government sector added about 3,400 positions from August to September. While the government sector has added more than 6,000 payrolls since last year, private sector growth has slowed of late.

But Dufrene said that doesn’t come as a surprise since Indiana has been ahead of the national average for private-sector growth.

“Without a pick up in demand, payrolls would have to stabilize or level off at some point,” he said.

If the government sector gains are removed, Friday’s reported drop in payroll is the largest since July 2009, which was the official end of the recession.

“The troubling number was the large reduction in professional and business services,” Dufrene said. “This could also be viewed as an overall deceleration in business activity.”

The next national jobs report will be significant in determining whether the slow down in business activity is a trend, Dufrene continued.

Despite the downturn in payrolls, the unemployment rate did drop in Indiana for the first time since April, and the labor force increased slightly.

“I find it particularly encouraging that Hoosiers are returning to the labor force,” said Scott B. Sanders, Commissioner of the Indiana Department of Workforce Development. “Indiana also continues to outpace the nation in rate of private-sector job growth and state continued unemployment insurance claims are at their lowest level since 2000.”

Locally, unemployment rates have dropped considerably compared to last year. Clark County’s jobless mark was recorded at 6.7 percent for September, down from 7.1 percent in August. Clark County’s unemployment rate was 8.4 percent in September 2011.

Floyd County’s jobless rate dipped to 6.4 percent, down from 6.8 percent in August. Floyd County’s jobless rate was 7.8 percent in September of 2011.