Michigan’s economy has been slowing over the past year, but its jobs picture may be far gloomier than the much-watched monthly reports have indicated.
Newly revised numbers show that Michigan actually lost 13,800 jobs in the 12 months ending in March, instead of the 25,900 jobs reportedly created in the period.
“It was an ouch,” said Gabe Ehrlich, director of the University of Michigan’s Research Seminar in Quantitative Economics.
The preliminary benchmark revision by the Bureau of Labor Statistics shows there were 911,000 fewer U.S. jobs created in the 12 months ending in March than reported in the closely watched monthly figures. It was the largest preliminary revision by the bureau in records going back to 2000 and cut U.S. job growth in the period in half.
Michigan had 39,700 jobs wiped out in the revision, the third most in the country behind North Carolina (56,900) and Colorado (51,200). Most of those lost jobs — 31,300 — came out of metro Detroit.
But the revision added 26,800 jobs to metro Grand Rapids. That was the highest-percentage jobs jump among metro areas with populations of one million or more.
The revision covered the last nine months of President Joseph Biden’s administration and most of the first three months of President Donald Trump’s administration. It didn’t provide monthly overestimates.
Ehrlich, who has been forecasting Michigan’s economy for years, cautioned that the final benchmark revision could reveal a smaller loss when it’s tabulated early next year, as has happened in the past.
And monthly BLS data show that Michigan has added 21,300 payroll jobs since March.
The conflicting numbers illustrate how difficult it is to understand what’s happening in a state economy being roiled by Trump’s chaotic tariff and trade policies and the recently passed One Big Beautiful Bill Act.
In its latest Michigan economic forecast this month, Ehrlich and his U-M colleagues took the unusual step of not estimating state government revenues for the next two years because of the unknown impact of the new federal tax-and-spending law.
“We believe there are important open questions about how these changes will interact with state revenue collections, and that these changes likely represent the largest updates to our outlook for state revenues since May,” the forecast said. “We expect to issue an updated full report and analysis with our November forecast.”
Their September outlook shows continued payroll job growth over the next two years, although at a much slower pace than the past several years. The state is expected to add 13,700 jobs next year and 12,100 in 2027, down from 38,700 this year.
But Ehrlich said he’s concerned about the state’s shrinking labor force. Employers added 5,000 jobs in August, according to the monthly report from the state Department of Technology, Management and Budget released earlier this month.
But the same report showed that 7,000 fewer people were employed than in July and that 14,000 people dropped out of the labor force last month. August’s state jobless rate fell slightly from 5.3 percent in July to 5.2 percent in August, mostly because of workers holding or seeking jobs.
“All I can say is that this month’s report is a real head-scratcher,” Ehrlich told me, adding that people shouldn’t “over-interpret” one month’s data.
But the labor force has been shrinking for five straight months and is down by 38,000 working-age adults since March.
And jobs are getting harder to find in Michigan. There were 1.44 unemployed people in the state for every available job in June, the highest level in five years.
A major part of the data confusion is the yawning gap between reported payroll jobs created by businesses and a separate household survey that determines the unemployment rate.
That’s not unusual in an uncertain, declining economy. Economists generally put more stock in the payroll numbers reported by businesses. But Ehrlich said this time what working people are reporting in government surveys might paint a more accurate picture of the job market.
“What we see right now is that the household survey may be mostly right,” Ehrlich said. “It’s tough to know.”
And it’s getting tougher, thanks to the Trump administration’s assault on the BLS, which collects a variety of crucial jobs and economic data.
In August, Trump fired BLS Commissioner Erika McEntarfer following a weak jobs report. Trump claimed, without evidence, that the BLS rigged the jobs numbers to make him look bad.
(Just wondering: if McEntarfer, aJoe Biden appointee, was cooking the books to hurt Trump, why would she have approved the big jobs revision that diminishes Biden’s record?)
Commerce Secretary Howard Lutnick has kept up the attack, saying the jobs numbers won’t be accurate until key people hired in Democratic administrations are purged from the agency.
Ehrlich said he still has confidence in the BLS, which he called “an unappreciated gem,” but he and other economists say data collection can be improved.
Part of the problem is that initial response rates from businesses and households have been declining since Covid, leading to big revisions as more data is collected.
“The BLS is doing the best job it can,” Ehrlich told me. “It’s a challenging job and there’s always room to improve. The resources have not been there to do that.”
It’s easier for Trump to blame the data rather than his own destructive policies, which are killing jobs, raising prices, stalling business investment and souring consumers.
- Rick Haglund writes the "Micheconomy" column for the Michigan Advance. He's a former reporter and business columnist for Booth Newspapers, now the MLive Media Group, with extensive experience covering Michigan’s economy and the auto industry. He now works as a freelance writer based in Southeast Michigan.
