(View WIN’s Interactive Michigan Unemployment Claims Dashboard.)
For the week ending May 2, 2020, the State of Michigan experienced another dip in initial unemployment insurance claims when compared to the prior week, with 68,952 initial claims filed. This reflects a decrease of 13,052 initial claims, or 15.9 percent, from the week prior (April 25, 2020). This is Michigan’s fourth consecutive week of claim decreases, indicating that the greatest number of new job losses and unemployment claims due to the shutdown occurred in late March and early April, so we will likely see these rates temporarily slow.
Michigan has the third highest insured unemployment rate (IUR), or the number of individuals receiving unemployment insurance as a percentage of the jobs covered by the unemployment insurance system, reported in the country for the week ending April 18, 2020, at 21.7 percent.[1] In previous weeks, Michigan has had the highest IUR in the nation, however, for week ending April 18, 2020, both Vermont (25.2 percent) and West Virginia (21.9 percent) experienced a greater rate. While much of this continued elevated IUR is related to the nature of employment in Michigan – a larger percentage of our workforce is employed in occupations relating to advanced manufacturing, skilled trades and engineering and design, much of which has been deemed non-essential – streamlined filing in Michigan may have contributed to the early relatively rapid rise in the reported IUR, as a greater proportion of our unemployed individuals were accurately captured in this estimate.
We can continue to use this methodology to predict the IUR for week ending April 25, 2020. Advance continued claims for the week ending April 25, 2020 were estimated at 1,041,344 claims, and covered employment continues was recorded at 4,305,711 workers for week ending April 18, 2020.[2] As a result, we can predict that the IUR for week ending April 18, 2020 will be around 24.2 percent, a 2.5 percentage point jump from the week ending April 18, 2020. For contextual purposes, the highest previously reported IUR in the State of Michigan was in January 2009, during the height of the Great Recession, at 8.88 percent.
As previously discussed, this IUR can be a useful predictor for the true unemployment rate (though these numbers are calculated differently – the former relies on official numbers of those receiving benefits while the latter is a measured through government surveys). The Michigan seasonally adjusted true unemployment rate for March 2020 was reported at 4.1 percent, an increase of 0.5 percentage points from February 2020. This number does not yet reflect the impact of the pandemic on Michigan’s economy, as the reference week for calculation was before the Stay Home, Stay Safe Order. While the true unemployment rate is only reported monthly, the IUR demonstrates that we can expect it to be hovering around 23 to 28 percent for the month of April. This is an advance prediction that may change over the next few weeks as the crisis continues.
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WIN’s data and research team will be continuously monitoring the impact of the COVID-19 pandemic in southeast Michigan and across the state over the coming weeks and months. Analysis will be posted to www.WINintelligence.org/COVID-19 on a weekly basis. Questions? Contact Melissa Sheldon, Karley Thurston, Deja Torrence or Michelle Wein.
[1] Last week we predicted the IUR to be 20.9 percent for the week ending April 18, 2020. The difference of 0.8 percentage points can be explained through the revision up in the number of continued claims (934,599 counted versus advance numbers of 899,362 reported) enumerated between weeks.
[2] Covered employment rose for week ending April 4, 2020, for the first time since January 11, 2020. We expect that some of this is related to an increase in number of workers, such as gig and self-employed, who are now eligible for benefits.