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Michigan unemployment rate up slightly as more jobseekers out looking

Jobs numbers released Thursday show Michigan’s unemployment rate edged up ever so slightly in August to 3.7%.

U.S. Social Security Administration

The numbers may seem paradoxical: The unemployment rate is up. So is the number of employed people. That’s because the unemployment rate reflects people who have jobs as well as people who are without jobs but are looking for work.

That combined number shows 25,000 people have joined the state workforce since July, said Wayne Rourke, who is labor market information director of the Michigan Center for Data and Analytics.

“The labor force increase that we’ve seen in the last six months in Michigan has been pretty substantial, bigger than we’ve seen in a long time,” he told Michigan Public Radio. “And that means we’ve seen people coming back into the labor market. They’re getting employed or they’re unemployed and looking for work and that’s going to help companies find workers, hopefully, and get their jobs filled.”

Rourke said the leisure and hospitality and government sectors showed the biggest job gains. He said that is because those are the industries that were hardest hit 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 growing number of jobseekers helped avert an expected recession.

“Part of the reason the economy has stayed resilient is that the labor supply has been expanding and it’s great to see that here in Michigan,” he said. “We did see the unemployment rate tick up a little bit, but it’s not because fewer people reported that they were working. It’s because so many people joined the labor force.”

“The fact that people are coming back in, taking jobs and looking for work is really great for the economy,” he said.

Ehrlich said the state’s economy appears well-positioned to handle a short strike by the UAW. Ehrlich directs UM’s Research Seminar in Quantitative Economics, which creates state and national forecasts.

He said the ripple effects of a strike on the employment picture could be mitigated as the Detroit Three automakers try to build up currently tight inventories. That could keep suppliers in business for the short term.

“By the time we get out to a strike that’s two months or longer, I would expect those spillover effects to be bigger than they would be at the beginning of a strike,” he said.

Rick Pluta is Senior Capitol Correspondent for the Michigan Public Radio Network. He has been covering Michigan’s Capitol, government, and politics since 1987.