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Michigan’s Jobless Rate Hits 2004 High; Auto Industry Layoffs to Blame

Michigan’s unemployment rate jumped to its highest level of 2004 during November as higher-than-expected layoffs in automotive manufacturing took hold. The state’s Department of Labor and Economic Growth said Wednesday the jobless rate rose four-tenths of a percentage point to 7 percent, more than a point and a half above the nation’s rate of 5.4 percent.

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From Detroit Free Press

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DETROIT — Michigan’s unemployment rate jumped to its highest level of 2004 during November as higher-than-expected layoffs in automotive manufacturing took hold.

The state’s Department of Labor and Economic Growth said Wednesday the jobless rate rose four-tenths of a percentage point to 7 percent, more than a point and a half above the nation’s rate of 5.4 percent.

The increase reinforced what economists have said throughout the year — that Michigan’s economic recovery is clearly lagging that of the nation as a whole.

“November was a very bad month for Michigan,” Patrick Anderson, a Lansing, Mich.-based economist, said of the latest numbers. “It’s really the worst progress report you could have hoped for.”

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Especially worrisome is that Michigan is still lagging the nation fully three years after the official end of the most recent recession in November 2001.

“Normally, a pro-cyclical economy like Michigan’s should be enjoying its best performance right now,” Anderson said. “Instead, we’re not only stuck, we’re sliding backward. It’s a very disturbing trend.”

In one of the few bright points in the report, officials noted the state’s jobless rate remains well below the rate of 7.6 percent recorded in November 2003, a sign that Michigan’s economy has improved somewhat since then.

“November’s jobless rate was the highest in Michigan for 2004, however, unemployment remains below last year’s levels,” said Bruce Weaver, acting director of DLEG’s Bureau of Labor Market Information and Strategic Initiatives.

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“November’s higher-than-expected job cuts in the manufacturing and temporary help sectors were related to production adjustments in the auto industry,” he added.

Michigan’s hard-hit manufacturing sector shed 7,000 jobs during November and is down an estimated 19,000 jobs since the same time a year ago. In recent weeks, General Motors Corp., Ford Motor Co., Visteon Corp., Delphi Corp. and other automotive firms have announced production cuts or job reductions in various locations as U.S. manufacturers continue to struggle with disappointing sales and declining market share.

With 699,000 factory jobs recorded in November, Michigan saw fewer than 700,000 factory jobs for one of the few times on record. Five years ago, Michigan boasted more than 900,000 manufacturing jobs.

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The state’s monthly survey of employers posted monthly job losses in other categories beyond manufacturing. Professional and business services lost 8,000 jobs, and leisure and hospitality services lost 4,000.

Offsetting these declines somewhat were small job gains in construction (up 3,000 jobs), education and health services (up 3,000) and government (up 2,000). All other industry categories registered minor payroll employment changes over the month.

Reflecting the poorer employment report, the state also found average weekly wages and hours in the transportation manufacturing sector declined slightly during November.

In a civilian workforce of just over 5 million people, 4.7 million Michiganders had jobs during November, and 354,000 were out of work but looking for employment.

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At the height of Michigan’s last economic boom in the late 1990s, only about 160,000 state residents were unemployed.

Copyright 2004 Detroit Free Press. All Rights Reserved.

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