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Unemployment Claims

2025 Michigan Annual Economic Analysis Report
Unemployment Claims

Brandon Fuller, Economic Analyst

Key Takeaways

  • Initial and continued claims started at elevated levels in 2025. However, in the second half of 2025, initial claims were typically lower than 2024 levels while continued claims remained only slightly higher than the previous year. This trend continued in early 2026.
  • Compared to 2024, continued claims were less concentrated in Manufacturing and more spread across the economy.
  • In 2025, a smaller share of claimants reached benefit exhaustion, but the average duration of benefit collection increased. Recent policy changes are likely contributing to these trends.

Rising Unemployment Insurance Claims Begin to Slow in 2025

Data Note: Initial claims are first-time applications filed by workers who have lost their jobs and want to receive temporary unemployment benefits. Continued claims are the weekly count of people who have already filed an initial unemployment claim and are continuing to receive unemployment insurance benefits.

There were just under 90,000 continued claims to begin 2025, a level last seen in 2021. Like 2023 and 2024, over-the-year increases in continued claims were consistent throughout 2025. However, the first and second halves of 2025 had much different over-the-year trends. Between January and June 2025, continued claims were 17.1 percent higher than the same time frame in 2024. From July through December 2025, continued claims were just 7.6 percent higher than the second half of 2024. This trend continued into 2026, as continued claims through the first half of 2026 were just 3.8 percent higher than the same period in 2025.

Even more pronounced, initial claims went from being 20.7 percent higher over-the-year during the first half of 2025 to 17.3 percent lower than 2024 in the second half. This trend has also lasted into 2026, as initial claims through June were 16.6 percent lower than they were in 2025.

Over-the-year growth in initial and continued claims slowed substantially in the second half of 2025 and into 2026.

Michigan Initial and Continued Unemployment Insurance Claims: Weekly Claims vs. 1-Year Ago

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Source: Employment and Training Administration, U.S. Department of Labor 

Over-the-year growth in initial and continued claims slowed substantially in the second half of 2025 and into 2026.

Over-the-Year Change in Initial and Continued Claims

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Source: Employment and Training Administration, U.S. Department of Labor

Continued Claims By Industry 

Manufacturing was the main contributing industry to the rise in continued claims between 2023 and 2024. The industry was responsible for 8.7 percentage points of the 14.2 percent increase between the two years. However, in 2025, Manufacturing was responsible for just 1.3 percentage points of the 12.7 over-the-year increase. Between 2024 and 2025, the industries most heavily contributing to growth in continued claims were Professional and business services; Trade, transportation, and utilities; Educational and health services; and Construction.

In 2025, contributions to the over-the-year increase in continued claims were more widespread across industries.

Contribution to Over-the-Year Change in Continued Claims, 2024 vs. 2025

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Source: Employment and Training Administration, U.S. Department of Labor 

Exhaustion Rates and Average Duration

Exhaustion rates – which measure the share of claimants that continue their benefits until exhaustion – also began to decline in 2025, after remaining relatively stable throughout much of 2024. Between December 2024 and December 2025, the exhaustion rate declined from 35.2 percent to 31.5 percent. This declining trend has continued so far in 2026, with a 27.8 percent exhaustion rate as of June 2026. While this could indicate individuals having more success finding employment, changes in Michigan’s unemployment insurance policies are likely contributing as well. Specifically, for new claims starting in April 2025, the maximum number of weeks someone may receive unemployment benefits increased from 20 to 26 weeks, naturally putting downward pressure on exhaustion rates.

Similarly, the average duration of unemployment insurance benefits is also likely affected by the increased maximum benefit amount and weeks of eligibility. In this case, the policy changes would put upward pressure on the average duration as the maximum amount of time someone could draw benefits has increased. Overall, average duration has increased steadily since the start of 2025 and ended the year at 12.5 weeks, up from 11.2 weeks in December 2024.

Recent trends in unemployment insurance exhaustion rates and average duration are likely partly driven by the increase in maximum benefit amount and weeks of eligibility, effective April 2025. 

Monthly Unemployment Insurance Average Duration and Exhaustion Rates in Michigan

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Source: Employment and Training Administration, U.S. Department of Labor 

Conclusion

As a result, the portion of the changes in continued claims that are due to labor market conditions as opposed to policy changes is not immediately clear. However, it is clear that fewer people are filing initial claims and that benefits are being claimed for longer durations. Continuing to monitor these metrics as the policy changes continue to become fully phased into the data will allow for a better understanding of changing labor market conditions.

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