By Annie Goeller, Daily Journal of Johnson County staff writer
Local unemployment dropped to the lowest level since February, dipping below 8 percent, but future months will show whether the local economy is truly recovering, economists said.
The county's unemployment rate was 7.8 percent in August, more than half a point below the July rate of 8.4 percent. In August, 5,718 workers filed for jobless benefits, compared with 6,197 in July, according to numbers from the Indiana Department of Workforce Development.
That drop was in line with counties around the state; and the statewide rate dropped to 9.9 percent, the first time the rate has fallen below 10 percent since early this summer.
The local rate was still higher than August 2008, when the rate was 4.9 percent and 3,693 workers were out of a job.
But economists are seeing signs of improvement, including logistics companies hiring new workers and laid-off employees finding new work in consulting.
Indiana and counties that have a large number of warehousing jobs, like Johnson County, typically lead in the increase and decrease in unemployment rates due to a recession, according to University of Indianapolis professor Matt Will.
Recently, he has seen several recent college graduates getting hired at logistics companies that are ramping up their work forces in an effort to restock the inventories of businesses around the state and nation.
Those same companies' work forces dwindled at the start of the recession when businesses stopped restocking because they had too much inventory, Will said.
But what happens next will show whether the recession is ending or if a relapse is coming, he said.
"Are we going to restock the shelves and no one will buy?" Will asked.
If that happens, the state and nation could turn around and go back into another recession, he said.
Another piece that isn't being considered in the numbers is workers who have lost their job but found work in consulting.
In the recession, more workers have been trying to start their own business since they have struggled to find work with another company, economist Morton Marcus said.
That includes people starting their own business and former company workers using their contacts from their old job to get involved in freelance and contract work, he said.
"We have much more of that going on these days than we have in the past," Marcus said.
Those people may not be included in the number of people finding work because they either are collecting unemployment to supplement their income while they look for work or they didn't file for unemployment because they found other jobs to do, he said.
But the numbers can be misleading at times, Marcus and Will agreed.
When the unemployment rate drops, that also can include workers who have lost their unemployment benefits because they ran out and they could not find other work.
And people who have left the work force, such as people who retired, would make the numbers look different because they have shrunk the available work force, Marcus said.
But those numbers are included in the rates and wouldn't change the reports from month to month, Will said.
"They're worse than they look, but they always look worse," he said.