Michigan’s unemployment rate reached 4.7% in October, up for the seventh straight month, and compared to 4.2% in the same month last year, according to data released Thursday by the Michigan Department of Technology, Management and Budget .
The national unemployment rate was 4.1% in October.
The numbers come as Michigan’s economy faces challenges this year due to persistent inflation, rising unemployment and declining real disposable income for workers.
The unemployment news also follows what economists called a “strong” economic recovery from the COVID-19 pandemic, in which Michigan businesses saw unemployment rates return to pre-pandemic levels and more people in the state were working compared to before the pandemic .
More people in work is good news, although some employers now say they are having trouble finding qualified candidates for job openings. And workers at some major Michigan companies say they need raises to keep up with inflation, motivating some to strike or threaten to strike.
Overall, Michigan’s economy is expected to remain about the same through the end of the year, and more than half of Michigan executives surveyed expect their revenues to increase during that time, according to the CEO Economic Outlook Survey from Business Leaders for Michigan published in August.
“We have seen improvements in our economic outlook in the short term, but there are persistent barriers to long-term sustainable growth,” Jeff Donofrio, president and CEO of Business Leaders for Michigan, said in a news release announcing the survey results. “Consumers and businesses are concerned about higher costs, much of which could be influenced by government policies and talent shortages.”
Many of the state’s top executives say they continue to have difficulty finding qualified people to fill open positions. 38% say they are having trouble filling vacancies, according to the Business Leaders for Michigan survey.
Business Leaders for Michigan sent another survey to executives in September, asking for the first time about the barriers companies faced in recruiting talent for jobs in the state. The top responses to the survey were location; awareness of the region’s density of opportunities and the quality of K-12 education, Randi Berris, vice president of marketing and communications at the Business Leaders for Michigan, said in an email.
“We need to do a better job of marketing ourselves and building connections between job seekers and employers,” Berris said.
She said Michigan offers a high quality of life and a relatively low cost of living, and pointed to projects such as the University of Michigan Center for Innovation; Michigan Central Station and Newlab; and the development of Henry Ford Health, Detroit Pistons and Michigan State University in Detroit, along with the Medical Mile in Grand Rapids, as developments that will inspire more companies to move to Michigan and where young professionals can grow their careers.
Still, there were more people available to work than vacancies in Michigan in August, according to the latest State Job Openings and Labor Turnover Survey, indicating a disconnect between the skills employers are looking for and the skills and experiences of job seekers.
Minimum education requirements apply to the majority of these vacancies. Of the roughly 178,000 online job postings available across Michigan in August, about 60% of them listed a minimum education requirement, according to Help Wanted Online data analyzed by the state.
To retain the state’s current residents and attract new ones to meet the workforce needs of local businesses, the State of Michigan’s Growth Office said last month it is awarding nearly $700,000 to five consortia in the state that have programs that focused on this mission.
For example, Discover Southwest Michigan will use marketing strategies and offer relocation assistance services and a down payment assistance program to attract skilled young professionals, especially those in in-demand fields such as STEM-H (science, technology, engineering, math and health). , production, IT and crafts.
Meanwhile, some major Michigan employers have cut jobs this year.
General Motors Co. laid off about 1,000 salaried and hourly workers on Friday, with more than half of the cuts coming from workers assigned to GM’s Global Technical Center in Warren. This is the second round of job cuts at the automaker in a few months.
Meanwhile, Stellantis said last week that 400 workers at a Detroit logistics facility would lose their jobs indefinitely, adding to the rising number of layoffs. The automaker cut as many as 2,450 union jobs at its Warren Truck plant in August.
In response to these layoffs and allegations that Stellantis is not meeting its investment commitments in the contract negotiated last year, several local unions have passed strike authorization votes as the UAW has threatened a possible strike.
However, industries such as construction have grown this year through October, adding 15,000 jobs, an increase of almost 8%. Government jobs increased by 3% (19,000 jobs) during that period.
Looking ahead, the University of Michigan Research Seminar in Quantitative Economics predicts that Michigan will have added jobs every year but one in the sixteen years from 2011 to 2026 (with the exception of 2020).
Executives responding to the Business Leaders for Michigan survey cited the state’s slow population and economic growth, rising costs, public policy and talent shortages as hurdles to overcome. Berris pointed in particular to the Earned Sick Time Act, which goes into effect in February and will expand paid sick time. Business advocacy groups in Michigan say the new laws represent a dramatic change for employers and reduce flexibility for employees when it comes to earning paid leave.
The University of Michigan researchers see two possible outcomes for Michigan’s economy.
“The former paints a challenging picture, with slowing job growth, rising unemployment and little growth in real disposable incomes,” UM economists Jacob Burton, Gabriel Ehrlich and Michael McWilliams wrote in the September report. “The second offers a more optimistic outlook, with statewide growth continuing through a period of high inflation and interest rates, and a subsequent slowdown in national economic growth.”
They say inflation has fallen enough for the Federal Reserve to ease interest rates (the Fed cut rates last week for the second time since September).
UM’s economic forecast for Michigan: According to the UM forecast, Michigan’s economy is at a crossroads: what the next two years may bring
More about the Fed’s interest rate cut: The Fed cuts rates for a second time, but economists say the outlook for 2025 is uncertain
The researchers predict that Michigan’s unemployment rate will remain at 4.7% next year before falling back to 4.6% in 2026, and expect real disposable income per capita statewide to rise next year as well will decline before returning to growth in 2026.
Contact Adrienne Roberts: amroberts@freepress.com
This article originally appeared on Detroit Free Press: Michigan’s unemployment rate continues to rise: What it means
