(The Center Square) – Michigan’s unemployment rate remains among the highest in the nation, even as the figure held steady to start the year.
The latest data from the state shows Michigan’s seasonally-adjusted unemployment rate was unchanged between December and January, coming in at 5%.
Employment declined by 10,000 over the month, while the number of unemployed residents rose by 3,000. That combination pushed Michigan’s total labor force down by 7,000 in January.
“Michigan’s unemployment rate remained at 5% in January as the state’s labor force fell below five million workers,” said Wayne Rourke, labor market information director for Michigan’s Center for Data and Analytics. “Payroll jobs were relatively flat both over the month and over the year.”
Nationally, the unemployment rate fell slightly in January to 4.3%, putting Michigan 0.7% above the U.S. average.
Despite some improvement over the past year, Michigan continues to rank among the states with the highest unemployment rates. In recent months, the state has trailed only a handful of others, including California, Nevada, New Jersey and Oregon.
In January, it ranked seventh-highest nationally, according to the U.S. Bureau of Labor Statistics. While still high, it is down from fifth-highest in recent months.
Delaware had the highest unemployment rate at 5.4%, tied with California. South Dakota, tied with Hawaii, had the lowest unemployment rate nationally at just 2.2%.
Earlier data showed Michigan’s labor force has been shrinking even as the national workforce grows, a trend that continued into January as total participation in the labor force dipped below five million workers. That is down 81,000 or 1.6% from January 2025.
Participation in the labor force is 60.6% in Michigan, 61.9% nationally.
The government sector had the largest increase in January, adding 2,000 jobs. Meanwhile, manufacturing saw the biggest decline, which lost 3,000 jobs.
This latest unemployment report underscores ongoing challenges in Michigan’s labor market. Opinions are divided on what is causing Michigan’s high unemployment compared to other states. Democrats say issues like tariffs, while Republicans lay the blame on economic policies pushed by Gov. Gretchen Whitmer.
