Michigan’s unemployment rate inched up again in July for the second straight month, increasing faster than the national average as the labor force expanded to include the most workers since 2006.

The seasonally adjusted unemployment in the Great Lakes State jumped three-tenths of a percent from June to 4.4% in July, as employment declined by 6,000, unemployment increased by 16,000, and the labor force grew by 10,000, according to the Michigan Department of Technology, Management and Budget.

“The uptick in Michigan’s jobless rate reflected an increase in both unemployment and the total workforce during July,” Wayne Rourke, director at the Michigan Center for Data and Analytics, said in a prepared statement. “Industry employment was mixed over the month which resulted in a slight decline in payroll jobs.”

Go Ad-Free, Get Content, Go Premium Today - $1 Trial

July marked the second straight month with Michigan’s unemployment rate on the rise, outpacing a 0.2 percentage point increase in the national unemployment rate.

“Total unemployment in the state rose by 7.8 percent over the month, while the national unemployment level advanced by 5.2 percent,” the MDTMB reports. “Michigan’s July labor force level was the largest workforce total seen in the state since April 2006 (5,064,000).”

In the Detroit-Warren-Dearborn metro area, unemployment increased at a slightly faster rate than the state overall, increasing 0.4 percentage points to 4.5% in July, with 10,000 more unemployed. Over the last year, the jobless rate in Detroit has increased by 0.9 percentage points, equating to about 21,000 more unemployed or a 26.6% increase.

Payroll estimates show over the last year jobs in construction, trade, natural resources and mining, private education and health services, and government has increased, while manufacturing, financial, professional, leisure, and other service jobs have declined.

Go Ad-Free, Get Content, Go Premium Today - $1 Trial

A WalletHub analysis of unemployment claims found Michigan ranked first in the nation for individual claims per 100,000 workforce members for the week ending July 22. The state also ranked second for the biggest increase over the prior week.

Michigan also placed third highest in the Unemployment Claims Increase versus Previous Week category and fifth in the Cumulative Unemployment Claims in 2024 versus Same Period Last Year category.

Michigan’s unemployment rate continues its upward trajectory as Democrats in Lansing work to expand benefits from what’s currently 20 weeks to 26.

Democrats in the lower chamber approved House Bill 5827, sponsored by Detroit Democratic Rep. Karen Whitsett, in late June, a move that would reverse reforms adopted by Republicans and signed into law by Republican Gov. Rick Snyder in 2011, Michigan Advance reports.

“When you look at 20 weeks, that’s really not a long time; 26 weeks definitely is something that is necessary to happen,” Whitsett told the news site.

Republicans who opposed the change sought to attach reforms to the measure that would have restricted the state’s unemployment system from changing rules regarding fraud investigations.

“The unemployment director made excuses for all the fraud the agency paid out during the pandemic, because the agency transferred investigators to other roles and rolled back safeguards to get payments out the door faster,” Rep. Mike Harris, R-Waterford, said in June. “My plan will ensure that the unemployment agency doesn’t roll back key fraud protections without approval from the people’s representatives.”

HB 5827 ultimately cleared the House on a party-line vote and is now pending in the Senate Committee on Labor.

Michigan Auditor General Doug Ringler issued a series of five reports detailing fraud, delays and mispayments by the Michigan Unemployment Insurance Agency during and after the pandemic. The final report in December found $245.1 million in potentially improper payments to folks who were dead, behind bars, or who did not qualify, including UIA employees, according to The Detroit News.

Prior audits and investigations estimated the state paid out more than $8.3 billion in improper unemployment claims, including at least $5.6 billion to suspected fraudsters, the news site reported.

Many in Michigan do not expect the state’s economic situation to improve any time soon, as businesses are reporting longer layoffs, and increased demand at food banks and discount stores. Just last week, Stellantis announced it plans to lay off 2,450 from its Warren Truck Assembly Plan beginning in October.

The Stellantis layoff notices went out around the same time a survey of members from the Business Leaders for Michigan found more than twice as many Michigan CEOs believe the state’s economy will get worse through the second half of 2024 than those who believe it will improve.

Jeff Donofio, the group’s CEO, cited “persistent barriers to sustained long-term growth” for the pessimism.

“Consumers and businesses are worried about increased costs, many of which can be impacted by state policies and talent shortages,” he said. “To grow our economy, Michigan needs to continue improving its competitiveness in job and business creation and talent.”

A recent Michigan Supreme Court decision that will phase tipped workers to minimum wage in the coming years is also expected to impact job numbers, as the Michigan Restaurant and Lodging Association predicts restaurants will lay off 40,000 to 60,000 employees due to the higher labor costs if lawmakers in Lansing don’t act before the transition begins in February.