Indiana‘s unemployment rate jumped in January to its highest level in 13 months to 8.6 percent, up from 8.3 percent in December, despite adding 8,200 jobs.
But the state Department of Workforce Development says the rise in the unemployment rate is due to a huge influx of people to the labor force, which is made up of both people with jobs and those actively looking for work.
State officials are also questioning the federal government‘s methodology used to determine the unemployment rate.
The rate comes from the government‘s survey of a sample of households in each state to determine the unemployment rate. The government also surveys employers to produce a second count of the number of jobs.
Indiana Workforce Development Commissioner Scott Sanders argues that figure should always be lower, because it does not count agricultural workers, the self-employed, or people on temporary unpaid leave.
“Individuals that were laid off in the economy downturn are now either back to work or on the sidelines. If the economy were getting worse, you would see your initial claims obviously spiking up higher than prior years,” he says.
Governor Mike Pence called the job numbers encouraging but said the economy is still struggling. In a statement, he called on the General Assembly to pass a budget that puts Hoosiers back to work, which he says would include his proposed 10-percent income tax cut.
“In light of today’s news, we have no choice but to remain bold in our efforts to strengthen our economy and put Hoosiers back to work,” Pence said in the statement. “We must enact a budget that holds the line on spending, funds our priorities, protects our reserves and allows hardworking Hoosiers and small business owners to keep more of what they earn.”
Senate Appropriations Chair Luke Kenley says the Pence tax cut is a viable option but the legislature has to determine the best way to stimulate the economy.
“And how do we go about doing this in a way that we don’t threaten our ability to just, you might say, maintain a reasonable budget in the future without some big hiccups?” Kenley says.
House Minority Leader Scott Pelath says expanding Medicaid under the Affordable Care Act is the best job creation measure, citing a study that says it could add up to 30,000 jobs in the state.
Network Indiana contributed to this report.