August 13, 2014 at 10:02 pm

Michigan's July jobless rate rises to 7.7%

The state unemployment rate increased by two-tenths of a percentage point during July, moving from 7.5 percent to 7.7 percent after losing 7,000 jobs.

According to data released Wednesday afternoon by the Department of Technology, Management and Budget, the higher rate was caused by workers losing their jobs and not by more workers joining the labor force, which is the more typical reason for an unemployment gain during an economic recovery.

July marked the second month this year to see rising joblessness, after a slight gain in May.

Nonetheless, the new 7.7 percent rate remains well below the July 2013 unemployment rate of 9 percent. The U.S. unemployment rate in July also edged up, gaining one-tenth of a point, to 6.2 percent.

A separate analysis of business payrolls, however, presents a brighter picture: According to the payroll jobs survey, Michigan employers added 18,000 workers during July.

The payroll survey looks only at nonfarm jobs listed by business owners, while the broader survey used for the official state jobless rate is a poll of households that include independent contractors, the self-employed and people who are working off the books.

There’s often a monthly discrepancy between the two survey methods but they do tend to move in the same direction over time, notes Bruce Weaver, economic analyst with the Michigan Department of Technology, Management & Budget.

“The two unemployment measures are up a fair amount,” Weaver said, noting that the household survey shows Michigan gaining 87,000 total jobs during the last 12 months, while the business payroll survey shows a gain of 59,000 jobs.

“Whether you look at the payroll or the household survey, you see employment up anywhere from 1.5 percent to 2 percent. Both of them are telling a similar story for the past year.”

According to the household survey, the state has gained 87,000 jobs since July 2013, with an increase of 26,000 workers to the state labor force, and lowering unemployment by 60,000 workers.

The payroll survey shows the biggest gains coming in the manufacturing sector, which added 17,000 jobs over the past 12 months.

Trade, transportation and utilities added 16,000 jobs, the leisure and hospitality sector gained 16,000 jobs, and business and professional services increased by 10,000 jobs. The biggest single payroll sector to lose jobs was a drop of 5,000 in the financial sector.

The average unemployment rate for the year so far is 7.6 percent, Weaver said, compared with an average rate of 8.8 percent for all of 2013.
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