Vehicle chip shortage slows Michigan’s recovery, but unemployment rate dips again

The U.S. unemployment rate inched upwards in April, but Michigan’s rate declined for the fourth straight month, per new data from the U.S. Bureau of Labor Statistics.

Michigan’s unemployment rate dropped from 5.1% to 4.9%, while the U.S. rate increased from 6% to 6.1%. The last time Michigan’s rate was below 5% was in March 2020 when it had a 3.7% unemployment rate.

But the progress could have been even stronger if it weren’t for the automotive industry, said Wayne Rourke, a state spokesman, in a news release.

“Auto-related layoffs in Michigan occurred in April 2021 due to the national shortage of semiconductor chips and the resulting impact on auto production,” Rourke said.

Michigan jobs in the “motor vehicles” and “motor vehicle parts” industries dropped by more than 13,000 in April, from 161,700 to 148,400. At least eight Michigan auto plants have had to temporarily close for a period this spring because of the shortage.

RELATED: ‘China is leading’ electric vehicle race, but America will win, Biden says in Michigan

Job growth in the leisure and hospitality sector was modest compared to past months. Jobs in “restaurants and other eating places” actually shrunk in April, going from 240,200 to 240,100. The biggest winner from the hospitality industry was the “arts, entertainment and recreation” sector, which went from 30,500 jobs in March to 35,300 in April.

Gov. Gretchen Whitmer celebrated the lower unemployment rate in a press release on Wednesday, May 19, saying Michigan will keep rebounding as money from the federal stimulus bill flows down.

“Thanks to the billions of dollars we have received under President Biden’s American Rescue Plan, we have a once-in-a-generation opportunity to continue providing relief and support to Michigan families, help small businesses expand and hire and make our state more competitive for good-paying jobs,” Whitmer said.

While the latest estimates show Michigan has 239,000 unemployed people, there have been between 600,000 and 1 million people claiming unemployment benefits in the state each week, in recent months.

One reason – people haven’t had to look for a job to get benefits, but a work search is required to be considered “unemployed.” But the rules are changing, as Michigan will require a work search for anybody who wants unemployment benefits starting the week of May 30.


Work search requirements for unemployment benefits return May 30 in Michigan

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