Michigan’s unemployment rate fell to its lowest level in 31/2 years during March, falling three-tenths of a percentage point to 8.5 percent, and two full points below the same month last year.
Payroll employment was nearly flat, increasing by just 1,000 jobs, according to data released Wednesday by the Michigan Department of Technology, Management & Budget. The number of jobless workers declined by 12,000, and the state labor force — everyone with a job or looking for one — climbed by 21,000.
At 8.5 percent, Michigan has narrowed the gap between the state unemployment rate and the national one, and now hovers less than half a point above the U.S. jobless rate of 8.2 percent. That’s a big improvement for a state that held the worst jobless rate in the nation for months on end, where the gap between the state and U.S. got as bad as 4.6 points in the summer of 2009.
“The labor market indicators are certainly continuing to show improvement,” said Bruce Weaver, economic analyst with the Michigan Department of Technology, Management & Budget.
In many months, the improvement in the state unemployment rate has come not from workers finding jobs, but from out-of-work men and women who either became discouraged and quit looking for work, returned to school, decided to retire, died or left the state. But since January, the state labor force has been growing while the number of unemployed workers has been shrinking.
Between February and March, the labor market grew by 9,000 workers. Normally, as the economy improves, the better job market prompts discouraged workers and others to jump back into the labor force to look for jobs. That increase in the number of people looking for work can temporarily halt the drop in unemployment or even temporarily raise the jobless rate, but that’s not happening yet in Michigan.
“That’s what normally happens in a recovery or expansion, as people become more optimistic,” Weaver said. “We haven’t seen a whole lot of evidence of that yet. The labor force is still 17,000 below where it was in March 2011, despite the fact that unemployment has fallen by 2 percentage points since then.”
While payroll jobs increased by just 1,000 in March, total employment in the state grew by 21,000, according to the state. That suggests a discrepancy in the two survey methods used to derive the unemployment numbers or a big jump in self-employed workers in the state. A survey of households asks if individuals are working or seeking a job, which includes the self-employed, while a survey of employers measures hired staff getting steady paychecks.
Brian J. O’Connor, The Detroit News