Michigan's unemployment rate increases to historic level in April as a result of COVID-19-related layoffs

Michigan's unemployment rate increases to historic level in April as a result of COVID-19-related layoffs

FOR IMMEDIATE RELEASE
May 20, 2020
Caleb Buhs, buhsc@michigan.gov or 517-282-6018

LANSING, Mich. -- Michigan’s seasonally adjusted jobless rate rose sharply in April to 22.7 percent, a monthly jump of 18.4 percentage points, according to data released today by the Michigan Department of Technology, Management & Budget. Employment in Michigan plunged by 1,130,000, while the number of unemployed grew by 839,000, resulting in a labor force drop of 291,000 over the month.

The large monthly unemployment rate advance reflected a continuing and deepening of the pandemic’s impact on the workforce, as most COVID-19-related layoffs began in the second half of March and continued through April.

The national unemployment rate grew significantly by 10.3 percentage points in April to 14.7 percent. Michigan’s rate was 8.0 percentage points above the U.S. rate. Over the year, the national jobless rate advanced by 11.1 percentage points, while the state rate climbed by 18.4 percentage points.

“April’s historic unemployment rate and job declines reflected the first full month of the COVID-19 pandemic’s impact on the state’s labor market,” said Jason Palmer, director of the Bureau of Labor Market Information and Strategic Initiatives. “Job losses were widespread across all industry sectors, with especially large employment reductions in leisure and hospitality and manufacturing.”

Monthly labor force trends and highlights

  • Michigan’s April 2020 unemployment rate of 22.7 percent is the highest rate since at least 1976 (as far back as comparable estimates go), likely making it an all-time high. The previous high rate over this period was 16.5 percent in December 1982.
  • The number of unemployed in Michigan was 1,048,000, also an all-time high. The previous peak was 725,000 in June 2009.
  • Michigan’s labor force level tumbled by 291,000 in April 2020. This dropped the state workforce in one month down to 1991 levels.

Detroit metropolitan area’s unemployment rate advances sharply in April
The Detroit-Warren-Dearborn Metropolitan Statistical Area’s (MSA) seasonally adjusted jobless rate rose substantially to 21.6 percent in April, a monthly gain of 17.0 percentage points. Total employment fell steeply by 539,000, while the number of unemployed jumped by 323,000. The Detroit MSA labor force was down by 216,000 in April.

Over the year, the Detroit jobless rate surged by 17.1 percentage points. Employment plunged by 526,000, while unemployment moved up by 324,000, resulting in a net workforce reduction of 202,000 since April 2019.

Michigan payroll jobs plummeted in April
The monthly establishment survey indicated Michigan seasonally adjusted jobs dove by 1,009,000 in April to 3,414,000. The reductions were widespread across all major sectors, with the greatest losses seen in industries deemed nonessential and those that required person-to-person contact. April job cuts were most pronounced in leisure and hospitality (-237,000); manufacturing (-174,000); and trade, transportation, and utilities (-159,000).

Industry employment trends and highlights

  • Michigan payroll jobs dropped substantially in April to the lowest level in the state since prior to 1990.
  • Previously, Michigan’s largest monthly job cut since 1990 occurred in January 2009, with a seasonally adjusted reduction of 100,000 jobs.
  • One of the most impacted industries was accommodation and food services, which accounted for two of every 10 jobs lost in April.
  • Some industries were impacted less by job cuts in April. As a result, financial activities, natural resources and mining, government, and information recorded the most modest job reductions on a percentage basis over the year.

For more detailed information, including data tables, view the full release.

 

Note COVID-19 pandemic:
State employment estimates are produced on a monthly basis using employment information from the week of the 12th of each month. The information in this release covers labor market trends for the week of April 12–18, 2020, in the midst of Gov. Gretchen Whitmer’s Executive Order 2020-42 “Stay Home, Stay Safe.”

As such, the information in this release significantly reflects the April employment impacts of the COVID-19 pandemic on Michigan’s workforce. 

For more information on the COVID-19 pandemic’s effect on workforce statistics, please visit the following resources from the U.S. Bureau of Labor Statistics:

Effects of COVID-19 on the Local Area Unemployment Statistics Program

FAQs – The impact of COVID-19 pandemic on The Employment Situation for March 2020

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