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Payrolls a better indicator?

The U.S. unemployment rate for November dropped another notch to 7.2 percent, the fifth consecutive month of improvement. The economic recovery has been under way for about a year and a half, and only now has the national jobless rate begun to reflect that recovery. For more than a year after recovery began, the rate continued to rise.

Indiana's unemployment rate, meanwhile, decreased to 5.9 percent in October, down from both the previous month's and previous year's figures. The 5.9 percent figure also is well below the U.S. figure for October. All of the state's metropolitan areas except New Albany recorded lower seasonally adjusted unemployment rates compared with the September figures, and most also had rates lower than the year-ago figures.

The uncharacteristic behavior of the unemployment rate during the recent recession and recovery raises questions about its merit for appraising the status of the economy--at both the national and local levels. For the state, establishment employment--the total number of people on payrolls in Indiana--would seem to provide a better perspective on the cycle status of the economy.

By that measure, total Indiana employment in October reached an all-time high, well above pre-recession levels. A look at establishment employment confirms that economic recovery has been in place for some time.

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Title Annotation:Indiana Indicators
Publication:Indiana Business Magazine
Date:Jan 1, 1993
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