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Indiana's unemployment rate stayed low in September, but 'uncertainty' lies ahead

A picture taken out a car window at a drive through. Part of a green sign reading "drive through"  is visible, next to it is a white sighn that reads "Hiring Part Time, 4 to Close, Schedules that respect education."
Adam Yahya Rayes
IPB News
Despite the total number of employed Hoosiers in September’s data remaining near record highs, the labor force participation rate is still a few percentage points below pre-pandemic years.

Indiana’s unemployment rate has remained below 3 percent for 12 straight months despite rising inflation, interest rates and layoffs.

New preliminary federal employment data from the Bureau of Labor Statistics show Indiana's September unemployment rate remained steady at 2.8 percent.

State employment numbers come out one month after the fact, not two like the BLS’ Job Openings and Labor Turnover data released earlier this week. Each release provides a preliminary number that is revised the month after.

The unemployment rates for the nation and several states surrounding Indiana are higher.

But not everyone who doesn't work is counted in the unemployment rate. Just more than 35 percent of all working-age Indiana residents are not considered unemployed, but also don’t have or aren’t actively looking for a job.

It’s not unusual for a chunk of the working-age population to be out of the labor force. Despite the total number of employed Hoosiers in September’s data remaining near record highs, the participation rate is still a few percentage points below pre-pandemic years.

People could be out of the labor force because they’ve retired, started college or lack child care, for example. Tin-Chun Lin, Indiana University Northwest professor of economics, explains it could also be because of the types of jobs available to them.

“What I can see is low-wage jobs [struggle to find workers] because now inflation [is] very high and the wage [they] pay is low,” Lin said.

If workers can’t find higher paying work because they lack credentials and degrees or because there isn’t anything higher paying in their area, some may find staying home and reducing spending more effective than working a low wage job, he added

While average wages are rising in Indiana and nationally, they aren’t keeping up with inflation.

READ MORE: Job openings drop, layoffs rise in August as Indiana businesses brace for rising interest rates

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“We want to reduce consumption, we want to save our money. So we don't go to a restaurant and then what happened?” Lin said. “The restaurant industry will [go] bankrupt and those cooks, waiters, they will lose jobs. So we reduce consumption to save individual’s wealth, but it will hurt this economy.”

The labor shortage combined with supply chain issues and the Federal Reserve raising interest rates to fight inflation create a lot of uncertainty for Indiana’s businesses and workers in the months ahead, he said.

“If we want a good economy, we still need to keep consumption and increase our consumption,” Lin said. “So that those businesses can keep [investing] in their business, and the economy can grow. But the problem is here, increasing demand or decreasing demand … will not make this economy better. The problem of this economy currently is supply.”

He points to the wheat and grain shortage caused by the Russian invasion of Ukraine and the Organization of the Petroleum Exporting Countries deciding to cut production by 2 million barrels per day as examples.

“So this issue is not [something] any individual can solve,” Lin said. “This becomes a political issue.”

Data tells us Indiana's very tight labor market could potentially see some major shifts soon. But numbers don't capture the full story. Is this affecting you, your family or your business? Share your story with reporter Adam at or on Twitter at @arayesIPB.

Adam is Indiana Public Broadcasting's labor and employment reporter. He was born and raised in southeast Michigan, where he got his first job as a sandwich artist at Subway in high school. After graduating from Western Michigan University in 2019, he joined Michigan Radio's Stateside show as a production assistant. He then became the rural and small communities reporter at KUNC in Northern Colorado.