Michigan unemployment decreased in October

Michigan’s unemployment rate decreased to 15.1 from 15.3 percent in October after a steady three-month increase.

However, experts are leery to say whether Michigan is out of the woods yet.

“We’ve been hovering around 15 percent since July,” said Jim Rhein, Michigan Department of Energy, Labor and Economic Growth economic analyst. “I think the trend is really that it’s flat, and that’s a good sign. The first half of 2009 was very difficult.”

From January to June, Michigan’s unemployment rate jumped 3.6 percent, to 15.2 from 11.6.

Associate economics professor Jason Taylor was more optimistic about the data.

“Unemployment rates can sometimes be deceiving,” he said. “In this case, however, total employment actually increased in the state for the first time since May 2007, several months before the credit crunch arrived and sent the (United States) economy into recession.”

Against the grain

As Michigan’s unemployment rate decreased for October, the U.S. rate increased to 10.2 percent from 9.8. One reason for Michigan’s improvement, Taylor said, may be that Michigan’s economy has fallen farther and faster than other states.

“We can hope that Michigan has hit rock bottom,” he said. “It makes sense that if we hit rock bottom before everyone else, we would start improving before everyone else.”

The largest growth was 25,000 jobs in professional and business employment, followed by 11,000 jobs in health and education services and 5,000 jobs in construction.

Taylor said the fact the professional and business sector added the majority of jobs is a good sign this is a permanent change.

“This employment bump is not just the effects of a temporary crutch like Cash for Clunkers artificially boosting employment in what is an otherwise declining sector,” he said.

The addition of construction jobs was a surprising and encouraging change, Rhein said.

“Construction had been down quite a bit,” he said. “It’s a very good sign, but we’re going to be very hesitant to say we’re making a huge turnaround at this point.”

Michigan’s unemployment rate is still 6 percentage points higher than it was in Oct. 2008 (9.1 percent).

“I’m still pessimistic about this happening given the negative business environment in the state, but we can hope and pray,” Taylor said. “One month does not make a trend. We should know more in the next few months.”