Michigan’s recent increase in unemployment was caused by an uptick in the number of people looking for work.
While an increased proportion of people looking for work is rarely good news, this time it is. The reversal of the state’s long-term trend of losing its workforce is a positive for the state.
The labor force is the number of people in the state who are either looking for work or are employed. From 2001 to 2003, Michigan lost a substantial number of both jobs and people looking for work. The situation never recovered, despite small increases in the labor force from 2003 to 2007. The recession hit Michigan and everyone else hard. While Michigan’s employment figures increased, the number of people in the labor force has been stagnant until just this year.
In effect, the state’s stagnant workforce hid some of its job market problems.
The trend changed this year.
The state has added 79,000 people to its labor force since December and household employment is up 84,000 people, causing a 0.2 percentage point decrease in the unemployment rate. While the unemployment rate didn’t change much, the increase in size of the state is roughly equivalent to the state adding a city the size of Warren.
Hopefully, this means that discouraged workers in Michigan are looking for work again.
A strong labor market includes both an increasing labor force and capacity to employ those people. The trends for both have been upwards.