Michigan Unemployment Rate Jumps Again in March Report

Michigan’s unemployment rose to 5.5% in March, the third consecutive increase, driven by job losses in manufacturing and business services. The state lags behind national employment trends, with significant challenges in workforce retention and participation highlighted by economic experts.

Michigan jobless rate edges up to 5.5% in March amid losses in manufacturing and business services, widening gap with national average.

Michigan Unemployment Rate Rise Signals Slowing Recovery

Michigan’s job market stumbled in March 2025, with the state’s seasonally adjusted unemployment rate rising to 5.5%, according to new data from the Department of Technology, Management & Budget (DTMB). This marks the third consecutive month of jobless rate increases and puts Michigan 1.3 percentage points above the national average of 4.2%.

The data also revealed troubling trends: 3,000 fewer employed residents, 5,000 more unemployed, and a labor force that, while growing modestly, remains a step behind the pace seen nationwide.

“This is a clear signal that Michigan’s economic recovery is under pressure,” said Wayne Rourke, labor market information director at Michigan’s Center for Data and Analytics. “The job losses we’re seeing, particularly in manufacturing and professional services, are dragging down the overall employment numbers.”

Payroll Job Losses Reflect Manufacturing Sector Weakness

The March decline of 5,000 payroll jobs statewide halted four months of steady growth. The manufacturing sector took the biggest hit, shedding 5,000 jobs, followed by a 4,000-job drop in professional and business services. These losses outweighed smaller gains in government (+2,000), other services (+1,000), and leisure and hospitality (+1,000).

Despite the month-to-month dip, total payroll jobs have increased by 24,000 (0.5%) since March 2024, with education and health services (+21,000) and leisure and hospitality (+7,000) leading the charge.

Economists note that while health services and hospitality continue to recover from the pandemic’s economic disruption, traditional sectors such as manufacturing face persistent challenges, including automation, global supply chain pressures, and shifting consumer demand. These factors have contributed to job losses across the state despite modest growth in other industries.

Detroit Metro Follows Statewide Trend With Jobless Rate Increase

The Detroit-Warren-Dearborn metropolitan area, which represents Michigan’s largest urban labor market, mirrored statewide patterns. The unemployment rate rose by 0.1 percentage points to 5.3% in March. While the region’s labor force grew slightly (+3,000), employment dropped by 22,000 over the year, and unemployment rose by 29,000—a significant spike of 33.7%.

These figures underscore the challenges facing urban centers like Detroit, which are struggling to retain and grow their workforce despite broader economic activity.

Michigan’s Workforce Trails National Employment Gains

Nationally, employment levels rose 0.1% in March, while Michigan saw a 0.1% decline. Over the past year, the national labor force has grown 1.6%, compared to 1.2% for Michigan, indicating that the state is not keeping pace with broader recovery trends.

Michigan’s employment-population ratio dipped to 58.6%, while the labor force participation rate remained flat at 62%. These rates suggest that many potential workers are still sitting on the sidelines, whether due to discouragement, skill mismatch, or caregiving obligations.

Labor force participation remains one of Michigan’s structural challenges,” note economists from the University of Michigan’s labor research community. Without stronger wage incentives and targeted job training programs, Michigan could continue to see stagnation in workforce growth—particularly in regions hit hardest by sector shifts in manufacturing and services.

Source: Michigan Department of Technology, Management & Budget, “Michigan unemployment rate advances during March”, released April 2025. (Page 1, paragraph 3 of the PDF.)

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