Unemployment: Rate tracks at 2.7% in January

Unemployment in Bartholomew County was relatively unchanged in January compared to the same month the year before, according to figures recently released by the Indiana Department of Workforce Development.

The local jobless rate stood at 2.7% in January, compared to 2.6% in January 2022, the figures show. Unemployment was 2% this past December.

Indiana’s unemployment rate was seasonally adjusted 3.1% in January, up from 2.9% in January 2022 and unchanged compared to this past December. U.S. unemployment was a seasonally adjusted 3.4% in January, down from 4% in January 2022 and 3.5% this past December.

At the same time, the local labor force totaled 44,416 in January, up from 43,140 in January 2022, state records show.

The update from state officials came as the federal government reported that U.S. consumer price increases eased slightly from January to February but still pointed to an elevated inflation rate that is posing a challenge for the Federal Reserve at a delicate moment for the financial system, The Associated Press reported.

The government said Tuesday that prices increased 0.4% last month, just below January’s 0.5% rise, according to wire reports. Yet excluding volatile food and energy costs, so-called core prices rose 0.5% in February, slightly above January’s 0.4% gain. The Fed pays particular attention to the core measure as a gauge of underlying inflation pressures.

Even though prices are rising much faster than the Fed wants, some economists expect the central bank to suspend its year-long streak of interest rate hikes when it meets next week, according to the AP. With the collapse of two large banks since Friday fueling anxiety about other regional banks, the Fed, for now, may focus more on boosting confidence in the financial system than on its long-term drive to tame inflation.

That is a sharp shift from just a week ago, when Chair Jerome Powell suggested to a Senate committee that if inflation didn’t cool, the Fed could raise its benchmark interest rate by a substantial half-point at its meeting March 21-22, according to wire reports. When the Fed raises its key rate, it typically leads to higher rates on mortgages, auto loans, credit cards and many business loans.

When measured against prices a year ago, inflation has been easing for eight months, according to wire reports. In February, consumer prices climbed 6% from 12 months earlier, down from January’s 6.4% year-over-year increase and well below a recent peak of 9.1% in June. Yet it remains far above the Fed’s 2% annual inflation target. Core prices in February rose 5.5% from 12 months ago, down slightly from 5.6% in January.

Nearly three-quarters of last month’s price increase was driven by housing costs. But most economists expect rental cost increases to slow in the coming months as more apartment buildings are constructed and new leases are signed at lower price levels. Such a decline could further slow inflation.