The statewide labor market has cooled significantly in recent months.
Michigan’s unemployment rate increased one-tenth of a percentage point to 4.5% in August, the third consecutive monthly increase.
The unemployment rate has increased by sixth-tenths of a percentage point since May when the rate was just 3.9%.
Michigan employers shed 2,200 jobs last month; in total, nonfarm employment is down 19,400 since May.
Manufacturing employment was essentially flat over the month (+400 jobs) but has contracted by 2% since last August (-11,300 jobs).
Only California (-27,900 jobs) has seen a larger manufacturing sector employment decline than Michigan over the last year.
Looking at data that has not been adjusted for seasonality, almost all of Michigan’s manufacturing subsectors have seen over-the-year job contraction.
The most significant decline has been in “transportation equipment manufacturing,” as “motor vehicle parts manufacturing” employment is down 7,800 jobs YoY (a 6% decline).
The only one of Michigan’s manufacturing subsectors to see job growth over the last year has been “plastics and rubber products manufacturing” (+400 jobs, +1%).
In addition to reducing headcounts, manufacturers have been cutting hours: the average hours worked by Michigan manufacturing employees are down 4% from August 2023.
On a positive note, the Federal Reserve’s rate cuts should spur an increase in capital investment and deplete suppliers’ inventories, leading to an increase in new orders for capital goods.
Sources:
Ryan Thyfault, Data Resource Manager at Kinexus Group
Bureau of Labor Statistics (BLS)
Michigan Center for Data and Analytics