Michigan's 21,000 jobless claims down 6,000 from prior week

Beth LeBlanc
The Detroit News

Michigan bucked the national trend this week as the state's number of unemployment claims plunged by 21% or about 6,000 claims last week as the country's total increased.

Michigan received 21,836 new unemployment claims, down from the 27,720 claims received during the prior week of July 6-11, according to U.S. Department of Labor Statistics aggregated by the Associated Press.

Nationwide, the number of weekly jobless claims rose last week to 1.4 million, up from 1.3 million new claims the week prior. The total statewide comes in at 32 million people, according to the Labor Department, but economists say some state claims are being double counted and the figure might actually come in at 25 million.  

Michigan unemployment rate in June was 14.8%, a 6.5 percentage-point decrease from May’s 21.3% unemployment rate and a reflection of the increasing number of businesses that have opened after cases and statewide restrictions dropped. The state’s unemployment rate prior to the pandemic was 3.6% in February and 4.3% in January. 

Between March 15 and July 23, the most recent time period available, the state paid $16.3 billion to more than 2 million claimants, according to the Michigan Unemployment Insurance Agency.

The agency estimates it's paid nearly 98%, or 2,085,132, of all eligible claimants at least once. But state representatives have reported that some jobless workers still have issues with claims that haven't been resolved. 

Unemployment payments were delayed significantly for many applicants as the agency struggled to manage drastic increases in unemployment claims during the pandemic. 

There were weeks during the pandemic in which hundreds of thousands of new claims were being filed while, prior to the pandemic, the state averaged 5,000 new claims a week. 

The state system was beset by fraudulent claims, a national issue, and Detroit U.S. Attorney Matthew Schneider last week charged an agency contract employee for allegedly taking part in a multimillion-dollar fraud scheme during the pandemic.

At one point, the state froze 340,000 active unemployment claims while it attempted to verify each claim.

As of early July, the state’s unemployment compensation fund had dipped below $2.5 billion, triggering by law a tax increase next year for employers, whose maximum unemployment contributions will be capped at $9,500 instead of $9,000. The fund started the pandemic with a balance of roughly $4.6 billion.