Kokomo — The unemployment rates of every metropolitan area in Indiana spiked in January, with the city of Kokomo’s rate climbing from 10.4 percent in December to 11.5 percent only a month later.
The state is questioning the validity of the federal unemployment numbers.
Workforce Development Commissioner Scott Sanders says the federal report used a new and inaccurate formula showing Indiana’s unemployment rate higher than it actually is.
The number of people out of work in Kokomo increased by 155 to 2,170 in January. The number of people employed dropped by 685 to 16,647, and that went along with a decline in the labor force of 530 to 16,647.
In cities of comparable size, the Kokomo unemployment rate was among the lowest in the state, trailing Muncie and Richmond.
Michael Hicks, director of the Ball State University Center for Business and Economic Research, said job growth numbers for the state are good news.
Hicks said the numbers are based on a survey of businesses and households, adding the business survey numbers are better.
“The household numbers are more volatile,” he said. “The seasonal factors aren’t working any more.”
Hicks said people are entering the work force at different times of the year, and with the perception that the economy is getting better, people are re-entering the work force.
He said the January and July numbers are always different because people are graduating from high school and community colleges in December and June and entering the work force.
“I don’t think things are getting worse,” Hicks said. “I don’t take the monthly numbers too seriously, unless it is confirming a trend. I don’t think anyone is intentionally distorting the numbers.”
Kokomo Mayor Greg Goodnight said he was not overly concerned by the numbers, either.
“When you look at unemployment on a month-to-month basis, it’s hard to get a good grasp of what is taking place,” he said. “I still feel things are going in the right direction.”
Goodnight agreed with Hicks that there might have been a sudden increase in the labor force in the Kokomo area.
Indiana added 8,200 private-sector jobs in January, marking the 19th consecutive month of job growth. Since July 2009, the low point of employment in the state, Indiana continues to outpace the national average for private sector growth (7.9 percent vs. 4.9 percent).
While Indiana experienced significant job gains in January, the 1,000 household survey used by the U.S. Bureau of Labor Statistics indicated the unemployment rate rose 0.3 percent to 8.6 percent, due to the labor force increasing by nearly 14,000 individuals, more than 10,000 of which returned to look for work over the month. January’s increase signifies the largest one-month expansion of our labor force since November 1993.
“It’s quite encouraging Indiana seems to be continuing the trend of private-sector job growth into 2013,” Sanders said. “However, it is very confusing when [the Bureau of Labor Statistics] has survey data from 5,000 businesses showing continued increases in employment, while the household survey continues to show employment below what businesses are reporting.”