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Mich. unemployment rate hits 14.1 percent in May

June 17, 2009, 4:34PM ET


Michigan's unemployment rate jumped to 14.1 percent in May, its highest mark in nearly 26 years, according to a state report released Wednesday.

The monthly seasonally adjusted rate is the highest recorded in the state since reaching 14.2 percent in July 1983. The rate is up from 12.9 percent in April and 8.2 percent a year ago.

The state's job situation likely will get worse as state economists predict Michigan's unemployment rate could average 14 percent this year and more than 15 percent in 2010. The struggles of the domestic auto industry including bankruptcies of Chrysler LLC and General Motors Corp. have hit Michigan particularly hard.

Gov. Jennifer Granholm had warned the latest jobless report would be ugly prior to its release.

"It's not good, and it's not unanticipated given what's happening in the automotive sector," Granholm told reporters Wednesday. "As we've said all along, in this summer, things are going to get worse before they get better, and today's unemployment number is a reflection of that."

Several states have not yet reported their May unemployment rates. But Michigan likely will remain the state with the nation's highest jobless percentage.

The national jobless rate was 9.4 percent in May.

Michigan's big jump in unemployment last month is largely related to the auto industry's problems.

"Major events continued to unfold in Michigan's auto industry in May, which had a considerable impact on the state's unemployment rate," Rick Waclawek, director of the state's Bureau of Labor Market Information and Strategic Initiatives, said in a statement.

Total employment dropped by 54,000 during the month. Total nonfarm payroll jobs dropped by 24,000. The state counted 682,000 people as unemployed in May.

Michigan lost 16,000 manufacturing jobs and 4,000 construction jobs. Employment also was lost in retail trade, education services and health services jobs.

About 3,000 jobs were added in government statewide. About 3,000 jobs were added to leisure and hospitality services with the start of the summer tourism season in Michigan.

LINK:Mich. unemployment rate hits 14.1 percent in May - BusinessWeek
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