NEW ALBANY — Indiana’s unemployment rate rose slightly in July from 8 to 8.2 percent, but the big number from the labor market report released Friday was that the state’s work force declined by about 20,000 last month based on seasonally adjusted figures.

From June to July, the number of unemployed Hoosiers increased by around 5,000 according to the U.S. Bureau of Labor Statistics study.

Floyd County’s jobless rate increased from 6.8 percent in June to 7.1 percent in July. Clark County’s unemployment mark also ticked upward from 6.9 percent in June to 7.2 percent in July.

Similar to Indiana, Kentucky’s unemployment rate also rose slightly from 8.2 percent to 8.3 percent last month.

“As in Kentucky, a declining labor force and increasing number of unemployed do not imply favorable labor market conditions, and suggest that the state’s labor market has cooled somewhat,” said Uric Dufrene, Sanders Chair of the Indiana University School of Business.

As has been the case before, state officials are questioning the accuracy of the U.S. Bureau of Labor’s reporting, questioning the methodology behind the surveys and referring to monthly data as “volatile.”

“We have raised several questions with the U.S. Bureau of Labor Statistics about discrepancies in June and July’s labor force data,” said Scott B. Sanders, commissioner of the Indiana Department of Workforce Development, in a news release Friday.

“The numbers seem to indicate nearly 46,000 Hoosiers went from gainfully employed in May to missing from the labor force in July, with no explanation.”

But based on the report, workforce development touted that Indiana added 10,700 jobs from June to July, and increased private sector employment for the ninth consecutive month with 3,300 new positions.

But Dufrene said the 10,700 new jobs figure isn’t as strong as it seems considering about 7,400 of those positions were government hires.

Manufacturing employment was down in Indiana last month, as the sector shed about 200 jobs.

“For both Indiana and Kentucky, manufacturing will continue to be a wild card,” Dufrene said, as he credited some of the economic growth in those states over the past year to a rise in automobile sales domestically.

He said manufacturing growth accounted for almost one-third of the new jobs in Kentucky and Indiana over the past year.

“However, manufacturing indicators continue to suggest that employment growth may decelerate, likely one of the reasons why manufacturing growth was basically flat for Indiana last month,” Dufrene said.

Indiana’s unemployment rate was higher last year, as it stood at 9.2 percent in July of 2011. The U.S. jobless mark was 9.1 percent in July of 2011, compared to 8.3 percent this year.

Dufrene said an increase in retail sales last month, reduction of unemployment claims and a rise in industrial production this week are positive signs for the economy.

But he again stated the country’s appetite for durable goods and automobiles will be a key factor moving forward.

“Labor market conditions in both Indiana and Kentucky have cooled just a bit, and the degree of cooling will depend on the manufacturing sector,” Dufrene said.