Reima Nasser, Economic Analyst
Data Note: Data on employment by industry is produced through the Current Employment Statistics (CES) program, which is published by the Bureau of Labor Statistics (BLS) in cooperation with the Michigan Center for Data and Analytics (MCDA).
Michigan’s labor market experienced a noticeable shift as the state moved past years of recovery and into a period of moderate growth. After reaching a 20-year high in 2024, annual average payroll job levels edged down in 2025. While overall employment dipped slightly, there were sharp contrasts across sectors. Strong gains were observed in Health care and social assistance and Government while steep declines were shown in Manufacturing and other auto-related industries. This section analyzes current employment data to provide insight into the transition of Michigan’s economy.
In 2025, Michigan annual average payroll jobs decreased to 4,483,600. This was a drop of 3,200 after four consecutive years of growth. Despite this, annual average payroll jobs remained above its pre-pandemic 2019 level, indicating that Michigan has maintained job growth even before the 2020 recession.
Annual Average Total Nonfarm Payroll Jobs in Michigan, 2000–2025
Source: Current Employment Statistics, Bureau of Labor Statistics
In the U.S., annual average employment inched up by 0.5 percent in 2025, marking the third consecutive year of slowing growth. This means that while employment is still increasing on an annual basis, it is doing so at a weaker pace. Essentially, employment gains in the U.S. have become smaller each year since 2022. Overall, Michigan’s average growth rate (-0.1 percent) was six-tenths of a percentage point below the national rate in 2025.
Across the nation, 36 states recorded annual average job gains, whereas the remaining 14 states noted average payroll job declines. During the year, average rates ranged from -0.8 percent in Maryland to 1.5 percent in Idaho. On an annual basis, Michigan tied Missouri and Wyoming for the 11th smallest average change rates in the nation. All 50 states observed smaller annual average job rate changes in 2025 compared to 2024.
Annual Average Job Change in Michigan and the United States, 2021–2025
Source: Current Employment Statistics, U.S. Bureau of Labor Statistics
Despite the over-the-year payroll job decline in Michigan, average annual employment increased in six of 11 industry sectors between 2024 and 2025. The strongest employment gains were recorded in Private education and health services (+18,200), Government (+7,700), and Construction (+4,500). In 2025, Health care and social assistance (+17,700) continued to be the primary driver of job additions within Private education and health services. Additionally, employment expansion in Michigan’s Government sector was due to job additions within Local government (+5,600) and State government (+3,600).
Several industry sectors saw declining payrolls in 2025. Over the year, numerical job losses were largest in the auto-related industries including Manufacturing (-19,200) and Professional and business services (-12,400). The majority of employment cuts within Manufacturing stemmed from losses in Durable goods (-15,700), while reductions in Professional and business services were driven by losses in Professional, scientific, and technical services (-5,400) and Administrative and waste services (-4,600).
The United States experienced over-the-year payroll job growth in 2025 (+764,000). The most prominent additions were seen in Private education and health services (+845,000), Government (+139,000), and Leisure and hospitality (+113,000). Like Michigan, Professional and business services (-164,000) and Manufacturing (-156,000) recorded the largest employment declines in 2025. Overall, Michigan and the U.S. exhibited similar patterns of positive or negative job change in every industry. However, the rate and scale of these changes varied, with certain sectors experiencing more pronounced growth or decline at the national or state level.
Annual Average Job Change by Industry Sector in Michigan and the United States, 2024–2025
Source: Current Employment Statistics, U.S. Bureau of Labor Statistics
Annual average Mining and logging jobs in Michigan declined by 2.8 percent over the year. Between 2024 and 2025, only six states recorded increases within this sector.
Michigan’s Construction industry (+2.3 percent) marked its fifth consecutive year of employment growth.
Annual average jobs within Michigan’s Manufacturing sector declined by 3.2 percent in 2025, ranking second (Oregon, -3.6 percent) for the largest decrease among states.
Trade, transportation, and utilities employment in Michigan declined in 2025 (-0.7 percent), as Wholesale trade (-0.9 percent), Retail trade (-0.7 percent), and Transportation, warehousing, and utilities (-0.6 percent) all reported jobs losses.
Average payroll jobs within the state’s Information sector receded by 2.5 percent. In 2025, 48 states recorded declining or unchanged annual average payroll employment within this industry.
Michigan ranked fifth among states for the greatest annual average employment growth in Financial activities (+1.3 percent).
Michigan tied Maine and Missouri for the fourth largest average decline within Professional and business services over the year (-1.9 percent).
Statewide average Private education and health services jobs rose by 2.5 percent. In 2025, all states except Wyoming recorded job growth in this industry.
The pace of job growth within Michigan’s Leisure and hospitality sector slowed down significantly in 2025 (+0.2 percent). Over the year, 47 states observed smaller rate changes in this sector in 2025 compared to 2024.
Average employment in Michigan’s Other services sector rose for the fifth consecutive year in 2025 (+0.6 percent).
Michigan tied Nebraska for the eighth largest average payroll job growth within Government (+1.2 percent).
During the first half of 2026, Michigan saw modest payroll job growth. Industries such as Government, Leisure and hospitality, and Manufacturing demonstrated strong employment gains since January 2026. Trade, transportation, and utilities and Information declined over the same period. Payroll jobs increased nationally during the first half of 2026 as well. Industries that stood out for the United States in job gains were Private education and health services, Professional and business services, and Trade, transportation, and utilities.
Michigan’s economic landscape continues to evolve as its labor market enters a period of transition. In 2025, annual average employment declined for the first time since 2020 and leveled off from historically high job levels. While significant job losses were concentrated within a few key industries, Michigan still saw positive trends overall. This highlights a reshaping economy rather than a uniform slowdown, with growth in service-providing industries nearly offsetting auto-related job cuts. Early 2026 data suggests that statewide payroll jobs and industry-level employment are rebounding and slowly gaining momentum.
