INDIANAPOLIS — Indiana’s jobless rate jumped a half percentage point in June — the biggest increase in the nation — as the state weathered layoffs in the auto and RV industries and a construction slowdown caused by heavy rains and flooding.
The U.S. Bureau of Labor Statistics reported Friday that Indiana’s June unemployment rate grew to 5.8 percent. The state’s 0.5 percent jobless rate increase from May was the nation’s highest, trailed by Arizona and Illinois, which saw increases of 0.4 percent.
Economist Michael Hicks, director of the Bureau of Business Research at Ball State University, said Indiana’s rising unemployment reflects a decreasing national demand for goods.
Consumer spending also has declined as Americans struggle with $4-a-gallon gasoline.
The rising unemployment also highlights the state’s continued dependence on manufacturing jobs and the auto industry, Hicks said.
“Indiana relies on manufacturing and we’re seeing the decline of manufacturing,” he said.
So far this year, the state has lost roughly 12,000 manufacturing jobs.
Last month, General Motors announced that nearly 400 workers had accepted voluntary buyouts in Indianapolis and Bedford. More layoffs could be on the way as GM prepares to cut its pickup truck production because of weakening demand.
Diminishing RV sales prompted Monaco Coach Corp. last week to close three northern Indiana plants, eliminating 1,400 jobs.
The state’s jobless rate was further boosted by flooding on June 6 and 7 that temporarily closed businesses in Franklin, Martinsville, Columbus and elsewhere.
The flooding and heavy rains also slowed construction throughout the region, said Teresa Voors, commissioner of the Indiana Department of Workforce Development.
Indiana’s June unemployment rate also exceeded the national rate — 5.5 percent — for the first time since March.
Democratic leaders pounced on the state’s rising unemployment as a sign that Republican Gov. Mitch Daniels’ economic development policies are not working.
“These figures are further proof that despite what Gov. Daniels would have us believe, our economy has some serious challenges,” said Jill Long Thompson, a Democratic candidate for governor.
Daniels argued that Indiana is faring better than neighboring states in the ongoing national economic slowdown. At 5.8 percent, Indiana’s June jobless rate was lower than Illinois (6.8 percent), Kentucky (6.3 percent), Michigan (8.5 percent) and Ohio (6.6 percent).
“Every state is (losing jobs),” the governor told reporters Friday. “You’ve got a national economic slowdown, and we are part of that economy.”
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8 a.m.: IN jobless rate up half-percent in June
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