Indiana's jobless rate jumped a half percentage point in June making it the biggest increase in the nation.
The U.S. Bureau of Labor Statistics says that Indiana's June unemployment rate was 5.8 percent. The state's 0.5 percent jobless rate increase from May was the nation's highest, trailed by Arizona and Illinois, which saw increases of 0.4 percent.
Economists are blaming the state's rising jobless rates on layoffs in the auto industries and construction slowdowns caused by the recent heavy rains and flooding over much of the state.
"The rising unemployment highlights the state's continued dependence on manufacturing jobs and the auto industry," says Ball State University economist Michael Hicks.
Hicks also said Indiana's rising unemployment reflects a decreasing national demand for goods.
Consumer spending has been declining as Americans struggle with high gasoline prices.
"Indiana relies on manufacturing and we are seeing the decline of manufacturing," he said.
This year alone, the state has lost approximately 12,000 manufacturing jobs.
Putnam County has experienced problems with companies cutting jobs.
Dixie Chopper laid off 30 people recently and less than a year ago, the International Automotive Components (IAC) eliminated 31 jobs.
Last month, General Motors announced that nearly 400 workers accepted voluntary buyouts in Indianapolis and Bedford and more layoffs are predicted to be on the way as GM looks to cut its pickup truck production.
Construction was also slow this year due to the flooding and heavy rains, according to the Indiana Department of Workforce Development.
The state's June unemployment rate also exceeded the national rate of 5.5 percent.
Governor Mitch Daniels told reporters last Friday that every state was losing jobs. He claims that Indiana is faring better than the neighboring states of Illinois with 6.8 percent, Kentucky with 6.3 percent, Michigan with 8.5 percent and Ohio with 6.6 percent jobless rates.
"Every state is losing jobs," said Daniels. "You've got a national economic slowdown, and we are part of that economy."
Daniels, who visited the Putnam County Fair Sunday, did not comment on jobless issues during what his aide's called "an unofficial visit to the county."