INDIANAPOLIS (AP) -- Indiana’s unemployment rate rose to 9.2 percent in January, the highest monthly mark recorded in the state since the recession of the early 1980s.

State officials blamed the latest jobless numbers on several factors, including drops in manufacturing and a greater than normal loss of retail jobs after the holiday shopping season. Unemployment rates were also up in Ohio (8.8 percent) and Michigan (11.6 percent).

“The manufacturing sector is the hardest hit area of the economy right now,” said Marc Lotter, a spokesman for Indiana’s Department of Workforce Development.

Indiana’s unemployment troubles have not yet reached the levels of the early 1980s recession, when the state jobless rate reached double digits in the fall of 1981 and stayed there for two years, peaking at 12.8 percent in November 1982.

Preliminary numbers show nearly 320,000 Indiana residents were looking for work in January -- compared with 260,000 in December and 155,000 a year earlier.

Elkhart County was again the epicenter of the state’s unemployment problem, with a jobless rate of 18.3 percent. That’s a tremendous 13 percentage point increase from January 2008. Layoffs in the recreational vehicle industry have driven much of the job loss in northern Indiana.

“No state has experienced the complete collapse of an industry like Indiana has with the RV industry,” Lotter said Friday.

But the same problems that devastated the RV industry, such as the credit crunch and lack of consumer confidence, can also affect industries in other parts of the state, said Kyle Hannon, a vice president of the Greater Elkhart Chamber of Commerce.

Hannon hopes Elkhart County helps lead the state out of the recession once things turn around, but said the jobless rates creeping up in other counties remind him of where his area stood six months ago.

“You better start looking around at your own community,” he said. “It will be coming to other parts of the state and of this country. People need to be ready for it.”

All of Indiana’s 92 counties are hurting. Every county recorded higher unemployment rates in January than December. And more than half of the state’s counties had unemployment rates in January of 10 percent or more.

The state’s preliminary January unemployment rate of 9.2 percent -- the state’s highest since January 1984 -- is a jump from December’s preliminary rate of 8.1 percent. That December figure was later revised to 7.8 percent, and January’s preliminary number is likely to change once more data comes in and the rate is finalized.

The national unemployment rate is also on the rise, from 7.6 percent in January to 8.1 percent for February.

Indiana got more bad news Friday when a new revenue report showed that state tax collections fell below expectations again.

State government took in $622 million in February -- $42 million less than predicted in the most recent fiscal forecast released in December and 10 percent below February collections last year. February marked the third straight month that tax collections fell short of their target.

State budget director Chris Ruhl said in a memo Friday that the December revenue forecast was likely too optimistic. Officials aren’t sure how bad things will get.

“Given the magnitude of the declines in revenue over the past three months, it is difficult to predict the bottom,” Ruhl wrote.

State tax revenue is now down about $600 million from what lawmakers approved for spending in this fiscal year. Gov. Mitch Daniels already has ordered budget cuts in hopes that the state will end its fiscal year taking in more money than it spends.

Posted 3/9/2009