State jobless rate lowest since ’01; 12,000 leave labor force
Michigan’s statewide jobless rate dropped during July, but not because more workers had jobs. Instead, unemployment dropped when more than 10,000 workers gave up looking for a job.
While total employment in the state remained steady, 12,000 workers left the state labor force, resulting in a drop of two-tenths of a percentage point in the jobless rate, which fell to 5.3 percent, according to data released Wednesday by the Michigan Department of Technology, Management & Budget.
It was the lowest monthly rate drop since August 2001, according to department statistics.
“Total employment was basically flat, but if you look at payroll jobs, they were up by 9,000,” said Bruce Weaver, an economic analyst with the Michigan Department of Technology, Management & Budget. “Most of that growth was in professional and business services, in things like engineering services, and we had a smaller than normal seasonal cut in temporary help.”
The official state jobless rate is based on a survey of households, and includes self-employed workers and independent contractors, while a separate survey of employers is used to track the number of payroll jobs. The two surveys often move in different directions from month to month, but move in the same direction over time.
The reduction in the labor force doesn’t necessarily mean all 12,000 men and women became discouraged workers who think it’s pointless to look for a job. People leave the labor force to return to school, retire or care for a loved one, for example. But if they don’t have a job and aren’t looking for one, they aren’t counted in the state labor force.
Overall, the trend in employment has been positive for the state. The July jobless rate is 1.7 percentage points below the July rate for 2014, with a total of 4.5 million state residents employed. For the past 12 months, payroll jobs are up by 96,000, total employment is up by 63,000, unemployment is down by 81,000, and the state labor force has lost 18,000 workers.
One year ago, the Michigan jobless rate was nearly a full point higher than the United States unemployment rate, but since April the two rates have both hovered between 5.5 percent and 5.3 percent.
“Payroll jobs have now increased in eight of the last 10 months, adding about 92,000 jobs in Michigan since September of last year,” Weaver said. “Payroll jobs are pretty much back to where they were in the spring of 2007, so jobs have rebounded pretty much to the levels where they were in the pre-recessionary period.”
Payroll jobs in Michigan peaked at 4.7 million in April 2000, about 400,000 more than the current 4.3 million jobs that give workers a regular paycheck. The labor force hit nearly 5.2 million in January 2001, about half a million more working men and women that July’s total of 4.7 million.