Skip to main content
Labor Force, Employment, and Unemployment

2025 Michigan Annual Economic Analysis Report
Labor Force, Employment, and Unemployment

Shibani Putatunda, Economic Specialist

Key Takeaways

  • Michigan’s 11-month annual average unemployment rate was 5.2 percent during 2025. Michigan’s unemployment rate hovered around 5.0 percent during the first six months of 2026.
  • Michigan was tied with Oregon and New Jersey in having the third highest 11-month annual average unemployment rate out of all states during 2025.
  • Michigan’s total employment and labor force both decreased steadily throughout most of 2025.
  • Michigan’s labor force participation rate trended downwards throughout 2025, reaching a three-year low during December.

Introduction

Data Note: Michigan’s Local Area Unemployment Statistics program (LAUS) provides economic indicators for the state, including employment, unemployment, labor force, and official unemployment rate estimates.

Michigan’s 2025 labor market softened compared with 2024 metrics, as the statewide labor force receded persistently throughout most of the year. This section examines the health of Michigan’s labor market through some of the state’s broad workforce measures such as the unemployment rate, total employment, and labor force.

Unemployment Rate

Data Note: The unemployment rate is a key economic indicator that is calculated by measuring the percentage of the labor force who are unemployed but actively looking for work. 

Between 2015 and 2025, Michigan’s seasonally adjusted monthly unemployment rate remained, for the most part, higher than the national jobless rate. Both metrics exhibited notable gains during 2020 as a result of the COVID-19 pandemic. The statewide unemployment rate largely fell between April 2020 and April 2023, reaching 3.7 percent; the lowest level since before the pandemic. Michigan’s jobless rate rose by slight increments during 2024, and began leveling off in 2025, resulting in an 11-month1 annual average jobless rate of 5.2 percent. Michigan’s 11-month average unemployment rate was 0.9 percentage points larger than the national 11-month annual average jobless rate of 4.3 percent.

Michigan was tied with New Jersey and Oregon in having the third highest 11-month annual average jobless rate out of all U.S. states during 2025, behind California (5.5 percent) and Nevada (5.3 percent).  

 

1Annual estimates for 2025 are 11-month averages that exclude October. Data for October 2025 were not collected due to the federal government shutdown.

Michigan’s unemployment rate leveled off between 2024 and 2025.

Monthly Unemployment Rate for Michigan and the United States, 2015–2025

Open content in a new window

Source: Local Area Unemployment Statistics, U.S. Bureau of Labor Statistics

Employment 

Michigan’s seasonally adjusted total monthly employment trended upward from 2015 through the first quarter of 2020 before receding by over 1.2 million, or 25.4 percent during April 2020. Total employment saw near consistent growth from May 2020 up until August 2023, before starting to taper off and then slowly decrease throughout 2024 and 2025. By November 2025, Michigan employment had fallen to 4,751,000, which was the lowest monthly employment level seen in the state since January 2023. By the end of 2025, Michigan’s employment fell by approximately 57,000, or 1.2 percent, since December 2024. In contrast, the national employment total in December advanced by 2.4 million over the year, or 1.5 percent.

Michigan household employment decreased throughout 2025.

Total Monthly Household Employment in Michigan, 2015–2025

Open content in a new window

Source: Local Area Unemployment Statistics, U.S. Bureau of Labor Statistics

Unemployment

Data Note: The number of unemployed includes Michigan residents who are not currently working but are actively seeking employment. Individuals who are not actively looking for work are not counted as unemployed but are instead considered as out of the labor force. 

After the height of the pandemic in April 2020, Michigan’s total unemployment level decreased relatively consistently until mid-2023. The statewide unemployment total then began to edge up until January 2025, reaching a level of 270,000, the highest total seen in the state since July 2021. Michigan unemployment then began to recede throughout most of 2025. Between December 2024 and December 2025, the number of unemployed people in the state declined by 19,000, or 7.1 percent. In contrast, the national unemployment level advanced by 8.4 percent during the same period.

The number of unemployed individuals in Michigan declined in 2025.

Total Monthly Unemployment in Michigan, 2015–2025

Open content in a new window

Source: Local Area Unemployment Statistics, U.S. Bureau of Labor Statistics

Workforce

Data Note: Michigan’s labor force includes individuals in the civilian noninstitutionalized population who are 16 or older and are employed or are unemployed and seeking employment.

Michigan’s labor force advanced after the height of the pandemic before leveling off in 2024. The state workforce began receding steadily throughout most of 2025. At 4,999,000 workers, November 2025 displayed the lowest labor force level in Michigan since May 2023. Between December 2024 and December 2025 Michigan’s labor force decreased by 76,000, or 1.5 percent. In contrast, the national workforce total advanced by 1.8 percent during the same period.

Michigan’s monthly labor force receded during 2025.

Michigan’s Monthly Labor Force, 2015–2025

Open content in a new window

Source: Local Area Unemployment Statistics, U.S. Bureau of Labor Statistics

Labor Force Participation Rate

Data Note: The labor force participation rate demonstrates the number of people in the workforce as a percent of the total population.

Michigan’s workforce participation rate increased steadily between January 2022 and September 2024. The participation rate then hit a downward trend that continued throughout 2025. In November and December of 2025, Michigan’s labor force participation rate reached the lowest level since December 2022 at 60.7 percent. In 2025, Michigan had the 17th lowest 11-month average workforce participation rate out of all states at 61.2 percent, behind New York at 61.1 percent.

Michigan's labor force participation rate hit a 3-year low of 60.7 percent during November and December 2025.

Monthly Labor Force Participation Rate in Michigan, 2015–2025

Open content in a new window

Source: Local Area Unemployment Statistics, U.S. Bureau of Labor Statistics

Preliminary 2026 Data

Michigan's labor force declined in the first six months of 2026 and the unemployment rate remained at 5.0 percent as of June 2026. The change in employed and unemployed individuals in the state contributed to the decline of 93,000 (-1.9 percent) labor force participants between December 2025 and June 2026. Over the time period, total employment fell by 92,000 (-1.9 percent) and total unemployment dropped by 2,000 (-0.8 percent).

Conclusion

Michigan’s 2025 labor market demonstrated a weaker labor market compared with the prior year, with total employment and labor force levels receding throughout the year. Michigan labor force participation contracted as well, reaching a three-year low level during the end of 2025. Michigan’s 11-month annual average unemployment rate was 5.2 percent during 2025.

Previous PageNext Page