Michigan’s jobless rate leveled off to 4.5% in August and September following small increases in the statewide unemployment rate over the summer. That’s according to data from the Michigan Department of Technology, Management and Budget, which also publishes the monthly jobs report.
The DTMB analysis shows the national rate receded by one-tenth of a percentage point, dropping to 4.1%. That difference of four-tenths of a percentage point was the biggest gap between the state and national numbers so far this year.
Swings in Michigan’s jobs numbers often exceed national averages, said University of Michigan economist Gabriel Ehrlich, who directs the Research Seminar in Quantitative Economics.
He said the upward bumps in state’s unemployment rate were largely a response to the Federal Reserve’s decision to increase key interest rates in an effort to combat inflation.
“What I would say is the Fed has been trying to cool off the labor market, so in a lot of ways this is what the Fed wanted to see,” he told the Michigan Public Radio Network, “but my sense is the Fed doesn’t want it to see it go too much further and that’s why you’ve seen the pivot to rate cuts.”
Eherlich said now the Fed is putting on the brakes to help avert higher unemployment. The Federal Reserve has cut its benchmark interest rate twice since September, most recently last Thursday.
“As the Fed cuts rates, eventually, that should work its way toward more consumer-facing interest rates such as vehicle financing rates, things like that, and that should boost Michigan’s labor market by making it more affordable to buy cars, for instance,” he said.
Michigan’s October jobs report will be out later this month.
