Nearly 25K new unemployment claims filed in Michigan last week, down 28% from week prior

Beth LeBlanc
The Detroit News

The number of new unemployment claims filed in Michigan last week decreased by 28% from the week prior, dropping from 34,602 new claims for the week ending July 4 to 24,897 new claims for the week ending July 11. 

The new tally comes a day after the state announced Michigan’s unemployment rate decreased in June to 14.8%, about 6.5 percentage points lower than May’s 21.3% unemployment rate.   

Prior to the pandemic, Michigan’s unemployment rate was 3.6% in February and 4.3% in January. 

Michigan's Unemployment Insurance Agency (UIA) website

Total employment in June rose by 464,000 jobs but was still 565,000 jobs below February levels. 

The gain in jobs and lower unemployment rate were “led by significant recalls in the auto industry,” said Jason Palmer, director for the Bureau of Labor Market Information and Strategic Initiatives. 

“The state unemployment rate also fell significantly but remains well above pre-pandemic levels and is comparable with rates recorded during the Great Recession in 2009.”

Nationally, the number of people seeking unemployment benefits was at 1.3 million last week, marking 17 straight weeks during which unemployment claims topped 1 million, according to the Associated Press. 

Between March 15 and July 6, the state paid $15 billion to 2 million claimants. The numbers are the most recent available, according to the Unemployment Insurance Agency. 

Payments across the board were delayed weeks as the agency struggled to manage huge upticks in unemployment claims during the pandemic. At the height of the pandemic, hundreds of thousands of new claims were being filed weekly. 

The agency, like many others throughout the country, also was slammed with fraudulent claims during the pandemic. At one point, the state froze 340,000 active unemployment claims while it attempted to verify each claim. 

State officials confirmed earlier this month that the uptick in pandemic-related unemployment claims had dragged the unemployment compensation fund from roughly $4.6 billion to below $2.5 billion. 

The dip below $2.5 billion will trigger by law a tax increase for employers in the next calendar year to help refill the fund. The taxation rate for unemployment contributions by employers will increase from a cap of $9,000 to $9,5000 in the next calendar year.