Michigan’s unemployment climbs, reversing a multi-year downward trend while signaling workforce challenges and opportunities in 2025.
Michigan Unemployment Rises Amid National Decline
Michigan’s seasonally adjusted unemployment rate climbed to 5.0% in December, an increase of 0.2 percentage points from November, according to the Michigan Department of Technology, Management & Budget (DTMB). This marks the state’s highest unemployment rate since October 2021, when it reached 5.1%. The rate contrasts with a national jobless rate of 4.1%, which declined slightly by 0.1 percentage points in December.
State labor market data reveals an unsettling trend: employment in Michigan decreased by 11,000 workers over the month, while unemployment grew by 8,000 individuals. The overall labor force saw a reduction of 3,000 people between November and December.
“After three consecutive years of jobless rate declines, Michigan’s annual average unemployment rate rose during 2024,” said Wayne Rourke, Labor Market Information Director for the Michigan Center for Data and Analytics.
Detroit Area Hit Harder Than Statewide Average
The Detroit-Warren-Dearborn Metropolitan Statistical Area (MSA) experienced a 4.9% unemployment rate in December, a 0.1 percentage point increase from the previous month. Employment in the Detroit region fell by 12,000, while the number of unemployed rose by 2,000. The area’s labor force also contracted by 10,000 in December.
Over the year, the Detroit MSA recorded a 0.9 percentage point rise in unemployment, mirroring the state’s trend. Employment dropped by a staggering 62,000, while the number of unemployed increased by 20,000 compared to December 2023.
Labor Force Trends Highlight Long-Term Challenges
While Michigan’s labor force participation rate remained steady at 62.2% for the third consecutive month, its employment-population ratio dipped slightly to 59.1%. The statewide data reflects broader annual averages, which paint a picture of modest employment growth alongside significant increases in unemployment:
- Michigan’s annual average unemployment rate for 2024 rose to 4.5%, compared to 3.9% in 2023.
- Employment averaged 4,821,000 in 2024, an increase of 9,000 or 0.2% over the year.
- The average number of unemployed individuals increased sharply by 33,000, or 16.9%, reaching 228,000.
Industry Highlights Show Uneven Job Growth
Michigan saw nonfarm payroll employment rise by 6,000 in December, marking the fourth consecutive month of job growth. Gains were most notable in the leisure and hospitality sector, which added 3,000 jobs. Other industries showing annual gains included government (+18,000), construction (+14,000), and private education and health services (+12,000).
Despite the positive growth in these sectors, losses were recorded in manufacturing (-2,000) and construction (-1,000) during December.
For the year, Michigan’s total nonfarm payroll jobs grew by 43,000, a 1.0% increase over 2023. Annual average total employment also rose for the fourth consecutive year, reflecting long-term recovery trends despite monthly fluctuations.
Broader Context: A Regional and National Perspective
Michigan’s annual unemployment rate increase outpaced the national rise. The U.S. jobless rate for 2024 averaged 4.0%, up just 0.3 percentage points from 2023, while Michigan’s rate climbed 0.6 points over the same period.
However, Michigan’s rising labor force participation and payroll job growth suggest underlying strengths that could mitigate long-term risks.
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