Michigan’s monthly unemployment rate dropped slightly by a tenth of a percentage point from July to 5.2% in August. The monthly jobs report from the Michigan Department of Technology, Management, and Budget released Thursday indicated that the dip was less because of an increase in people finding jobs, and more because of people exiting the workforce.
The report said that while the number of payroll jobs remained steady, the unemployment percentage was affected by about 14,000 fewer people holding or seeking jobs. This is the fifth consecutive month the state’s workforce has shrunk.
“While the number of unemployed people are decreasing, the number of employed is not going up,” said Michigan Labor Market Information Director Wayne Rourke. “So, these people are just leaving the labor market and not looking for a job.”
Some reasons for that include people aging out of the workforce, jobseekers getting discouraged and the high childcare costs that are keeping people at home.
Rourke said Michigan’s workforce participation has been slowly declining for a while.
“I can tell you this five-month-in-a-row drop in labor force, and the magnitude is pretty significant looking at history,” he said. “It’s larger than what we typically see. So, it’s a trend that we’re keeping an eye on, for sure.”
University of Michigan economist Gabriel Ehrlich said the jobs news demonstrates the complexity of the state’s economic picture right now.
“I’m going to be honest with you – this month’s jobs report is a head-scratcher,” he said.
“Seeing a substantial decline in the labor force can be discouraging news,” he said. “It can be a little bit of a sign for concern and so it is good to see the unemployment rate falling, but the underlying reason isn’t as positive as we would hope.”
Thursday’s jobs report is an early snapshot of the state of employment and the economy in Michigan. It will be rounded out in future weeks and months with more state and federal data.
The U.S. Labor Department’s national jobs report released earlier this month showed employment growth lagged behind expectations. The revised June report showed the nation lost jobs for the first time in five years.
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