For the week ending April 25, 2020, the State of Michigan experienced another dip in initial unemployment insurance claims when compared to the prior week, with 81,312 initial claims filed. This reflects a decrease of 55,395 initial claims, or 40.5 percent, from the week prior (April 18, 2020). Michigan, among California, Washington, New York and Georgia, saw one of the largest decreases in the country of initial claims filed for the week ending April 25, 2020, 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 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 11, 2020, at 21.8 percent (1). While much of this 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 relatively rapid rise in the reported IUR, as a greater proportion of unemployed individuals are captured in this estimate.

We can continue to use this methodology to predict the IUR for week ending April 18, 2020. Advance continued claims for the week ending April 18, 2020 were estimated at 899,362 claims, and covered employment continues was recorded at 4,305,711 workers for week ending April 11, 2020 (2). As a result, we can predict that the IUR for week ending April 18, 2020 will be around 20.9 percent, a 0.9 percentage point drop from the week ending April 11, 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 21.9 percent for the week ending April 11, 2020. The difference of 0.1 percentage points can be explained through the revision down in the number of continued claims reported 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.

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