News Summary

Initial unemployment claims in Michigan declined to 5,939 last week, showing signs of potential stabilization in the labor market. This decrease follows a sharp spike in early May, when claims rose by nearly 130%. While claims have hovered around 6,000 for months, upcoming changes to unemployment insurance laws promise to provide more support to residents. The decrease in claims is part of a national trend, offering hope for economic stabilization amidst ongoing challenges in the labor market.

Lansing, Michigan – Initial unemployment claims in Michigan saw a decline last week, offering a glimpse of potential stabilization in the labor market. The number of new jobless claims dropped to 5,939 for the week ending June 21, down from 6,191 the previous week, as reported by the U.S. Department of Labor. This is part of a larger national trend, where U.S. unemployment claims fell to 236,000, a decrease of 10,000 claims from the prior week’s total of 246,000 on a seasonally adjusted basis.

In comparison to Michigan’s recent trends, new claims spiked dramatically in early May, when they surged by nearly 130% for the week ending May 3. During that time, the state recorded an increase in new claims from 5,381 to 12,287. The reasons behind that steep rise were not immediately identified, but it coincided with significant layoffs across various sectors. In March, Michigan’s unemployment rate rose to 5.5%, exceeding the national average, which added pressure on the workforce.

The biggest contributors to jobless claims in early May included the manufacturing sector, accommodation and food services, and administrative support and waste management industries. Notably, manufacturing employment in Michigan experienced a loss of 5,000 jobs in March. Affected companies have also filed WARN Act notices, indicating upcoming layoffs. Among significant layoffs were Akasol, which laid off 188 workers in Warren and Hazel Park, and Flagstar Bank, which announced plans to reduce its workforce by approximately 400 employees following canceled transfer plans.

Despite the recent drop in claims, Michigan’s unemployment claims have generally hovered around the 6,000 mark for several months, slightly elevated compared to similar periods over the past two years. As states respond to ongoing economic challenges, some regions, like Vermont, have seen unexpected increases in claims; Vermont’s jobless claims soared by 108.9% last week. In contrast, Minnesota reported the largest percentage decrease in new claims, with a decline of 41.6%.

Looking forward, changes to Michigan’s unemployment insurance law are poised to take effect on April 2, 2025. Under these new regulations, residents will be able to collect benefits for an extended period, with the maximum duration increasing from 20 to 26 weeks. The minimum eligibility period will remain at 14 weeks. Furthermore, the maximum benefit amount will be adjusted to $446 in 2025, $530 in 2026, and $614 in 2027, significantly improving the financial support available to claimants. Additionally, the benefit amount per dependent is set to increase from $6 to $12.66 each in 2025, more than doubling the previous amount.

The upcoming changes are part of a legislative response initiated by Governor Gretchen Whitmer, who signed the adjustments in December. The implementation of these laws, however, faced delays due to various legislative requirements. Claimants who file for unemployment benefits between January 1 and April 2, 2025, may qualify for these higher benefits based on individual circumstances.

Overall, while the recent drop in initial claims in Michigan signals a possible easing of claims pressure, the state continues to navigate various challenges in its labor market. Understanding the dynamics of these changes is crucial for both workers seeking benefits and policymakers aiming to enhance economic stability.