Michigan’s jobless rate down to 5.4% in 2015

Brian J. O'Connor
Detroit News Finance Editor

Michigan’s average unemployment rate for 2015 was 5.4 percent, a drop of 1.9 percentage points from the previous year.

The state ended the year with a December monthly jobless rate of 5.1 percent, unchanged from November. As of New Year’s Eve, the number of unemployed workers had decreased by 60,000 jobs compared with the end of 2014, while the number of workers with jobs grew by 99,000. The state labor force gained 39,000 workers in that time.

The number of workers on company payrolls also increased during the year, gaining 80,000 jobs, including 10,000 positions added in December, according to data released Wednesday by the Michigan Department of Technology, Management & Budget.

“The rate has been basically flat since August, hanging right around this 5 percent level,” said Bruce Weaver, economic analyst with the Michigan Department of Technology, Management & Budget. “The rate of unemployment in the state has fallen for six consecutive years, and 2015 will be the fifth straight year that we’ve had an increase in payroll jobs.”

The state’s biggest payroll jobs gains came in manufacturing and in education and health services. Both sectors added 19,000 jobs during the year. Payroll job cuts came in just two categories: a 2,000-job drop in the information sector and 7,000 jobs cut in government employment.

“Those two particular sectors are the ones that have been flat or declining throughout the year,” Weaver said. “On the other side, about 70 percent of the jobs that have been added since December 2014 have occurred in four areas: manufacturing, health care, professional and business services, and construction.”

However, many residents who should be in the labor force aren’t working or looking for a job. Since 2007, nearly 300,000 Michigan workers had given up looking for a job. Workers older than 60 retired early after finding no jobs available after the recession hit. And those younger than 25 stay on the employment sidelines in school, where they can borrow to cover their tuition. Others, however, in the peak of their working years, lack the education and skills needed to land new jobs.

The percentage of the state’s population over the age of 16 in the labor force before the recession was 59.2 percent. In November, that participation rate was down at 55.2 percent.

“Throughout the country, participation rates were cut quite sharply during the recession and in many states the participation rates have not come close to fully rebounding,” Weaver said. “That certainly has been the case here in Michigan.”

But the December jobs data did indicate an encouraging uptick in the labor force, with 22,000 more men and women either finding a job or looking for one. That explains why, even though employment increased by 20,000 jobs, the unemployment rate didn’t budge from the November 2015 level. With more non-participation workers coming off the sidelines would be a good sign.

For the coming year, University of Michigan economists are forecasting the state will add about 126,000 jobs in the next two years, which they estimate will push the state jobless rate down to 4.8 percent for 2016 and to 4.5 percent by the end of 2017.