State jobless rate finally on par with U.S. level

Michigan's unemployment rate dropped to 5.4% in April to reach a milestone not seen for 15 years and now equal to the nation's number.

It marked the first time the state and national rates stood at the same level since September 2000, an achievement that boosts those who herald Michigan as the nation's leading comeback state.

Even so, Michigan's economy is yet to recover all the jobs it lost during its lost decade. That remained a sobering footnote to the otherwise upbeat jobs report.

"Michigan has displayed an impressive run of monthly jobless rate reductions over the past year," said Jason Palmer, director of the state's Bureau of Labor Market Information and Strategic Initiatives. "Statewide payroll job levels have increased by nearly 100,000 since April 2014."

As every Michigan worker knows, between 2000 and today, the state endured an economic crisis of appalling dimensions. The state lost 800,000 jobs, or roughly one in five, over a 10-year run. The jobless rate ranked as the worst in the nation for prolonged periods. Two of its signature companies, General Motors and Chrysler, went through bankruptcies.

Michigan's unemployment peaked at above 14% during the depths of the Great Recession, and as recently as a couple of years ago the state's rate remained among the worst in the nation. But a series of recent improvements has brought Michigan's rate down to the middle of the pack now among the 50 states.

Who gets the credit for that dramatic improvement remains a matter of debate. Backers of Gov. Rick Snyder and his policies cite his pro-business tax changes and his successful backing of Detroit's bankruptcy reorganization. Others give more credit to the nation's general economic improvement, since the state's outlook generally mirrors that of the nation at large.

"Quite a remarkable result, really," Charles Ballard, a professor of economics at Michigan State University, said of the latest jobless figures. "A lot of that is a rebound in manufacturing but it's not just in manufacturing, it's all sectors. I think a big part of what's going on is that we've finally got some momentum, the positive ripple effects when an economy is growing."

As for giving credit for Michigan's rebound, Ballard cites two main benefactors -- the general improvement in the nation's economy and the federal rescue of the domestic auto industry during the Great Recession. The auto industry rescue engineered by Obama administration officials, Michigan's congressional delegation, Canadian authorities, and the industry is largely credits with helping GM and Chrysler survive.

"Absent that we would be in worst shape now than we are," Ballard said of the automotive rescue. "Gov. Snyder has projected a very positive image and I think his policies probably have contributed some but the biggest part is the general recovery and especially the auto industry."

Robert Dye, chief economist for Comerica Bank, pointed to another reason for Michigan's rapidly improving jobless rate – the state's slower-than-average workforce growth. "Labor force growth in Michigan has been well below the U.S. average over the past several months," he said, which as part of the complex calculation of the jobless rate means that Michigan's rate would decline faster relative to the national rate. Michigan added 88,000 jobs over the past 12 months but its overall workforce shrank by about 10,000, which translates into a faster-than-normal drop in the jobless rate.

In terms of specific industries in April, Michigan employers added 3,000 jobs in April to a total workforce of 4.255 million. April job gains were recorded in professional and business services, which gained 3,000 jobs, and construction (up 2,000 jobs). Declines were posted in education and health services (down 3,000). Other sectors saw only minor changes.

Contact John Gallagher: 313-222-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep.