Michigan’s unemployment rate has risen slightly as more people are looking for work

Jobs data released Thursday showed Michigan’s unemployment rate rose slightly to 3.7 percent in August.

The numbers may seem paradoxical: the unemployment rate is rising. Also the number of employed people. This is because the unemployment rate reflects people who have jobs as well as people who are not working but looking for work. That cumulative figure shows 25,000 people have joined the state’s workforce since July, said Wayne Rourke, director of labor market information for the Michigan Center for Data and Analytics.

“The increase in the labor force that we’ve seen in the last six months in Michigan has been pretty significant, more than we’ve seen in a long time,” he told Michigan Public Radio. “And that means we’ve seen people get back into the job market. They are employed or unemployed and looking for work, and that will hopefully help companies find workers and fill their jobs.”

Rourke said the largest job gains were in leisure and hospitality and the public sector. He said this is because these are the industries most affected by the pandemic. Professional and business services showed the biggest decline.

University of Michigan economist Gabriel Ehrlich gave the August jobs report a “B-plus.” He said the rise in the number of job seekers had helped stave off the expected recession.

“One of the reasons the economy has remained resilient is that the labor supply is expanding, and it’s good to see that here in Michigan,” he said. “We’ve seen the unemployment rate go up a little bit, but it’s not because fewer people are reporting that they’re working. That’s because so many people have joined the workforce.”

“The fact that people are coming back, getting jobs and looking for work is very good for the economy,” he said.

Ehrlich said the state’s economy appears to be in a good position to weather the brief UAW strike. Ehrlich directs UM’s Research Workshop on Quantitative Economics, which produces state and national forecasts.

He said the strike’s ripple effects on the employment picture could be mitigated as the Detroit Three’s automakers try to build up small inventories. This can keep suppliers out of business in the short term.

“By the time we go into a strike that lasts two months or longer, I expect the fallout will be greater than it would have been at the start of the strike,” he said.

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