Indiana's unemployment rate was 3.4 percent in September, up from 3.3 percent, where it had been since February. It is the first increase since August 2024. The Bureau of Labor Statistics (BLS) does not count the change as statistically significant; rates fell in five states in September and were stable in the other 45. Indiana remains below the national rate of 4.2 percent and is tied with Ohio, North Carolina and Tennessee for the 14th-lowest rate among the 50 states. Ohio's rate also rose, from 3.3 percent to 3.4 percent. Illinois is at 4.6 percent, Kentucky at 4.7 percent and Michigan at 5.0 percent.
In September, Indiana's labor force grew by about 2,600 while the number of employed residents was flat, so about 3,500 more residents were counted as unemployed.
A year ago, Indiana's rate was 3.7 percent. BLS does not count that decline as statistically significant either, and it came from a smaller labor force, not from more people working. The labor force, the residents who are working or looking for work, shrank by about 18,900 over the year, and the number of employed residents fell by about 8,800. If the labor force had stayed the same size, the loss of employed residents alone would have raised the rate to about 3.9 percent. Employers report the same flat picture. Indiana had 3.26 million payroll jobs in September, 12,900 fewer than a year earlier, a change too small for BLS to call statistically significant.
Labor forces shrank in 39 states over the past year. Indiana's decline, 0.5 percent, is smaller than the 0.7 percent decline for all states combined.
Layoffs remain low. Over the four weeks ending Oct. 10, Hoosiers filed about 2,230 new unemployment claims per week, 17 percent fewer than in the same weeks last year. In late September and early October, about 17,000 people per week were still collecting benefits. That is 12 percent fewer than a year ago but about one-quarter more than in the same weeks of 2019.
The September metro area report comes out Oct. 28, and the October state report comes out Nov. 20.
Sources: U.S. Bureau of Labor Statistics (BLS), State Employment and Unemployment, September 2026 (preliminary), and Local Area Unemployment Statistics; U.S. Department of Labor, weekly unemployment insurance claims for Indiana (not seasonally adjusted), via FRED. Unemployment rates are seasonally adjusted. BLS published no October 2025 state estimates because of the federal government shutdown.