Michigan's Jobless Rate Hits 5.1% Amid Government Shutdown Delay

Some of the first official government data that indicates the health of Michigan's economy, delayed for months because of the government shutdown, was released on Dec. 10. A report with Michigan's unemployment rate for September was released, which shows the state's jobless rate declined slightly compared with August. Michigan's unemployment rate is higher than the U.S. rate of 4.4%.

Michigan's unemployment rate dropped to 5.1% in September, down from 5.2% in August and level with the state's jobless rate in September 2024, according to the Michigan Department of Technology, Management and Budget.

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The decline in Michigan's jobless rate can be attributed to fewer people working or looking for work. The number of people working in Michigan fell by 2,000 in September compared with August and the number of unemployed people dropped by 5,000, leading to an overall decline in the state's labor force.

More on Michigan's economy:

Michigan employers are in a wait-and-see mode — and workers feel the pinch

September marks the seventh consecutive month total employment has declined. Since February, 28,000 fewer people in Michigan are employed, the department said.

Monthly job losses, according to a monthly survey of employers, were led by private education and health services, which decreased by 5,000 in September compared with August, the department said. Michigan’s construction sector saw the largest over-the-month employment increase, with jobs increasing by 4,000 since August.

Weekly unemployment claims, meanwhile, have remained slightly below typical levels for this time of year. There were 7,242 new claims for unemployment insurance benefits, a proxy for layoffs, in the week ending Nov. 29, according to data released on Dec. 4 by the U.S. Department of Labor, compared with 7,757 the week prior. Last year at this time, there were 9,561 new claims for benefits.

This unemployment data backs up how Michigan economists, business association leaders and labor attorneys have described the state's economy in recent months. Jeff Donofrio, president and CEO of the Business Leaders for Michigan, said in an October interview with the Detroit Free Press that "everyone is sort of waiting on how to act from an economic standpoint."

University of Michigan economists said Michigan's economy likely hit a "growth pause" this fall that could drag into 2026, according to a recently released forecast.

The economists said in the forecast that the "the risk of misjudging the underlying strength of the economy has grown amid the federal government shutdown, which has delayed the release of key economic data."

"These gaps in information make it more difficult to assess turning points in activity, especially in areas such as consumer spending, business investment and labor market conditions," the economists wrote.

More on what to expect moving forward:

U-M economists say Michigan's economy hit a 'growth pause' but some gains could be ahead

What data to expect moving forward

Some data from the federal government shutdown period will never be released. The Michigan Department of Technology, Management and Budget said data for Michigan's unemployment rate in October has been canceled because the shutdown "impeded the ability to collect survey data for the October reference period."

Michigan's jobless rate in November will be released on Jan. 6, the department said.