InContext

A publication of the Indiana Business Research Center at Indiana University's Kelley School of Business.

The comeback: How Hoosiers are recovering from the economic shutdown

Kent Sellers

Nonstore retailers are experiencing the most growth in job postings, unsurprising due to more people shopping online.

This age of COVID-19 and the resulting recession has impacted every Hoosier. It is no surprise that the economy has taken a hit. While there are many ways to assess Indiana’s shutdown and/or recovery-in-progress, exploring a few traditional labor market information (LMI) sources, as of August 2020 (preliminary data), should provide some insight.

Since the closures related to COVID-19 basically happened all at once, the economic recession that began in the spring makes it unlike previous recessions in many respects. Indiana’s seasonally adjusted unemployment rate went from a low of 3.0% in March 2020 to a high of 17.5% the following month of April. This peak was higher than the Great Recession peak of 11.0% in January and February of 2010.

The unemployment insurance (UI) claims followed a similar trend of magnitude. The initial UI claims peaked at 120,331 claims for the week ending March 28, 2020. This was more than four times greater than the number of initial UI claims during the highest peak in the recession (week ending Dec. 27, 2008), and it was over 52 times greater than the number of initial UI claims in the week before the spike of claims (week ending March 14, 2020).

According to the seasonally adjusted figures of the Current Employment Statistics program, Indiana’s total nonfarm employment declined 14% from February to April.

When looking at second quarter real gross domestic product (GDP), Indiana’s economy declined 33% from the previous quarter, according to data from the U.S. Bureau of Economic Analysis.

The comeback

The big picture

Indiana is nearing the employment levels experienced pre-recession, according to the Current Employment Statistics from the Indiana Department of Workforce Development. For the purposes of this article, the pre-recession level is defined as the average of January 2020 and February 2020. In August, total nonfarm employment, which includes both private and public jobs, is at 3,056,100 seasonally adjusted jobs, which was 4% fewer jobs than the pre-recession period.

Online job postings are experiencing a similar trend, according to the seasonally adjusted data from Burning Glass Technologies. In August, Indiana had 65,017 seasonally adjusted job postings. This was also 4% down from pre-recession postings.

Although Indiana still hasn’t quite caught up to its pre-recession levels, the state is trending in the right direction (see Figure 1).

Figure 1: Percent change in employment and job postings relative to pre-recession levels

Line graph from March to August 2020 showing total nonfarm employment and online job postings

Note: Data are seasonally adjusted.
Source: Current Employment Statistics, Indiana Department of Workforce Development (employment) and Burning Glass Technologies (job postings)

By industry

In 2019, Indiana’s six largest supersectors (a term from the U.S. Bureau of Labor Statistics) were

  • Trade, transportation and utilities
  • Manufacturing
  • Private education and health services
  • Government (includes public schools and hospitals)
  • Professional and business services
  • Leisure and hospitality

Out of these top six supersectors, leisure and hospitality experienced the largest job losses in April, both in terms of number (-127,150) and percentage (-41%)—approaching half of all jobs in the sector.

As seen in Figure 2, Indiana’s six largest supersectors have a little ways to go to catch up with pre-recession levels.

Figure 2: Employment change for the top six industry supersectors relative to pre-recession levels

Column graph from March to August 2020 showing change in employment for manufacturing; private educational and health services; trade, transportation and utilities; leisure and hospitality; professional and business services; and government

Note: Data are seasonally adjusted.
Source: Current Employment Statistics, Indiana Department of Workforce Development

Online job postings provide an excellent way to see which industries are experiencing unique growth during this time, especially when looking at the percent change of job postings from pre-recession levels. Table 1 shows industries that are posting ads at a higher rate than normal. For example, nonstore retailers (ranked #1) are experiencing the most growth (by far), unsurprising due to more people shopping online. Thus, online groceries and their distribution centers need to hire more workers to meet this demand. It is likely many workers from the leisure and hospitality sector are now gaining employment in this sector.

Table 1: Online job postings by industry

Industry (NAICS 3-digit) Jan/Feb average Aug Change Percent change
Nonstore retailers                        91 2,207 2,117 2,339%
Miscellaneous store retailers 296 687 392 132%
Data processing, hosting and related services 39 73 35 90%
Couriers and messengers 265 492 227 86%
Heavy and civil engineering construction 35 58 23 66%
Wood product manufacturing 45 71 26 58%
General merchandise stores 1,133 1,638 506 45%
Plastics and rubber products manufacturing 32 43 12 37%
Postal service 72 97 26 36%
Justice, public order and safety activities 63 81 18 29%

Note: Data are seasonally adjusted.
Source: Burning Glass Technologies

By occupation

In addition to looking at the job postings of industries, job postings can also provide insight into the occupations that are experiencing unique growth during this time (see Table 2). Again, packers and packagers (ranked #1) shows the demand that warehouses and distribution centers have during this new growth of online shopping.

Table 2: Online job postings by occupation

Occupation (SOC 6-digit) Jan/Feb average Aug Change Percent change
Packers and packagers, hand 95 508 414 438%
Loan interviewers and clerks 31 97 67 218%
Stock clerks and order fillers 591 1,633 1,042 176%
Laborers and freight, stock and material movers, hand 1,123 2,796 1,674 149%
Team assemblers 107 226 120 112%
Packaging and filling machine operators and tenders 41 86 45 110%
Home health aides 232 455 223 96%
Carpenters 78 151 74 95%
Amusement and recreation attendants 32 62 30 94%
Production workers, all other 471 908 438 93%

Note: Data are seasonally adjusted.
Source: Burning Glass Technologies

One thing to consider during this recovery is that most of those jobs that are experiencing unique growth are low-skill and low-wage jobs. The distribution of education credentials in Table 3 attests to the argument that the unique growth in job postings for August are for lower skill jobs.

Table 3: Online job postings by education credential

Minimum education advertised Jan/Feb average Aug Change Percent change
High school or vocational training 16,988 20,341 3,353 20%
Associate degree 3,694 3,493 -201 -5%
Bachelor’s degree 11,481 8,714 -2,767 -24%
Master’s degree 1,226 983 -243 -20%
Doctoral degree 584 410 -174 -30%

Note: Data are seasonally adjusted.
Source: Burning Glass Technologies

By metro area

The hit to Indiana’s economy has been felt across the state, however, certain areas have been hit harder than others. As seen in Figure 3, no metropolitan statistical area (MSA) has fully recovered in terms of employment; however, the Evansville MSA is only 1.9% lower than its pre-recession level. The Elkhart-Goshen MSA declined the most (down 20.7% from pre-recession to April 2020), but has experienced the second-greatest comeback (up 14.1% from April 2020 to August 2020). The Kokomo MSA had the second-largest decline (down 19.3% from pre-recession to April 2020), but has experienced the greatest comeback (up 19.1% from April 2020 to August 2020).

Figure 3: Employment change by metro area

Map of Indiana metros, with employment change ranging from -10.4% in Lafayette to -1.9% in Evansville.

Note: Data are seasonally adjusted.
Source: Current Employment Statistics, Indiana Department of Workforce Development

Find more

Much of the traditional labor market information found in this article can be found at the Hoosiers by the Numbers website (http://www.hoosierdata.in.gov). This website provides info on state and local employment, unemployment rates, UI claims and other economic indicators.

There are two pages within Hoosiers by the Numbers worth highlighting:

  • COVID-19 Resource Hub: This page, curated to capture the most useful information, is dedicated to the many COVID-19 data and tools that exist to understand the full scope of the pandemic—from the disease itself to the impacts on the economy.

  • Economic Region Analysts: For those wanting to look at your own local labor market, this is a good place to start. Each regional analyst page provides up-to-date indicators on the region and custom labor market reports. You can subscribe to these reports, view some helpful regional stats and other regional tools/resources, or get the contact information for your regional workforce analyst.