Unemployment On The Upswing

January 29, 2003
| By Katy Rent |
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LANSING — The Michigan Department of Career Development (MDCD) announced that Michigan’s unemployment rate in December increased two-tenths of a percentage point to 5.9 percent, employment fell by 24,000, and unemployment rose by 11,000 as the state civilian labor forces declined by 14,000.

The state’s jobless rate was just one-tenth of a percentage point below the national rate of 6 percent. Over the two-year period ending in December, the Michigan and U.S. jobless rates have recorded similar hikes of approximately 2 percent.

Michigan’s December jobless rate was three-tenths of a percentage point lower than the December 2001 rate of 6.2 percent.

“Michigan’s labor market in late 2002 continued to feel the fallout of a still struggling national economy,” said John Palmer, deputy director for Workforce Programs for the MDCD. “However, put into historical perspective, the state’s unemployment rates in both 2002 and 2001 were lower than in past economic downturns.”

The state’s employment drop in December was the largest monthly decline in 2002. In 2002, employment fell in nine of the 12 months.

From the third to the fourth quarter of 2002, Michigan’s jobless rate fell half a percentage point, from 6.2 to 5.7 percent. However, this reduction was primarily due to fewer persons in the state labor force, as both employment and unemployment fell during the quarter.

The fourth quarter 2002 unemployment rate was the lowest for the state since the third quarter 2001 rate of 5.4 percent.

From December 2001 to December 2002 employment in Michigan fell by 1.1 percent. Joblessness nationwide was up 4 percent in the same period.

Michigan’s 2002 preliminary annual average unemployment rate was 6.1 percent. That was an increase of eight-tenths of a percentage point over the 2001 annual average rate of 5.3 percent, and was the highest annual average jobless rate for the state since the 1993 rate of 7.1 percent.

Last year marked the second consecutive year that Michigan’s annual average unemployment rate increased. However, the pace of increasing joblessness in 2002 was only about half the 1.7 percent jump recorded in 2001. Prior to 2001, the state’s annual average unemployment rate declined nine years in a row.

The average number of weeks individuals remained unemployed increased from more than 11 weeks in 2001 to more than 15 weeks in 2002.

According to the monthly survey of employers, seasonally adjusted Michigan payroll jobs in December fell by 20,000 to total 4,516,000. Payroll job loss was widespread throughout most industry sectors and was led by decreases in retail trade and manufacturing.

Other sectors recording payroll employment declines of note included government and construction. The drop in retail trade was partially due to merchants hiring fewer workers than usual for the holiday season.

Payroll jobs in Michigan were down 0.9 percent over the year with the majority of job loss occurring in both retail trade and manufacturing. Since December 2001 retail trade employment dropped 19,000, or 2.3 percent, and manufacturing was down 11,000, or 1.2 percent.

Four other major industry sectors — construction, government, wholesale trade and transportation, and communications and utilities — recorded payroll employment declines since December 2001. Of these four sectors, construction registered the largest employment reduction, decreasing 2.4 percent.

Some major industry categories displayed slight employment gains over the year. These sectors included services, finance, insurance, real estate and mining. Services, the largest of all industry sectors, recorded a small increase of 0.3 percent over the year.           

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