Five years ago, people reacted with ridicule if you suggested that low unemployment rates could be a problem for the economy. But in the time that has followed, employers in every industry from movie theaters to web page design have found themselves doing handstands to keep their positions staffed, and economic developers began to realize that a higher than average unemployment rate in their community could be a marketing advantage. Places like Hamilton County saw jobless rates tumble to just 1 percent, and scenes of families in bidding wars for babysitters and fast food restaurant managers paying bonuses to workers simply for showing up at the job became commonplace. 

At the national level, fast growing technology companies did more than simply complain about their difficulties in hiring qualified workers. They commissioned studies that purported to show exactly how much growth the shortage of workers was costing the economy, and used their influence to get politicians to change their positions on visas and other immigration policies that could help relieve the situation.

But, unhappily, the economy has served up a different form of relief, in the form of an economic slowdown that has put the brakes on hiring, especially in manufacturingand the technology sector. The trend of gradual attrition in factory jobs nationwide turned into something much more serious at the beginning of this year, with nearly half a million jobs eliminated since that time. 

Meanwhile the torrid pace of job creation by companies in the far-flung business services industries -- which had averaged about 600,000 new jobs per year prior to 2001 -- also pulled up short. Thanks to a nearly 350,000 job decline in temporary services jobs that began last fall, this sector has gone from leader to laggard, losing about 40,000 jobs per month since January. 

What has this abrupt turnabout in the pace of hiring done to the tightness of labor markets in Indiana and the nation as a whole? Not as much as you would think. The U.S. unemployment rate, even in the teeth of the slowdown, has risen by about half a percentage point. That's significant enough to make a difference, but its May value of 4.4 percent still is low by historical standards. 

But the behavior of unemployment rates in Indiana is something of an enigma. In the face of indicators such as tax receipts, unemployment claims, and manufacturing employment that portray a falloff in economic activity in most areas of the state, the Department of Workforce Development reports that jobless rates here are on the way down, not up. Every one of the state's twelve major cities had lower unemployment rates in April than the previous month, with some monthly declines in excess of a full percentage point. Statewide, the seasonally adjusted jobless rate for Indiana stood at just 2.9 percent in April, 0.7 percentage points lower than the 3.6 percent rate at this time last year. 

This is not the first time in recent memory that Indiana unemployment rates have gotten out of synch with other measures of economic activity, and the next few months of data may prove the April report to be an aberration. But data quibbles aside, it doesn't appear that employers are going to have any easier time finding workers this summer in Indiana.