May 24, 2004

May 24, 2004 | WebMemo on Economy

Michigan Leads a National Jobs Boom

Every month, the Labor Department reports the national unemployment rate along with hundreds of other vital measures. Two weeks after this national release, the Department reports similar data for all 50 states and the District of Columbia. This month's state data release confirms that the national expansion in jobs is widespread across all sectors and all regions.

 

Over the last month, from March to April, total nonfarm payroll employment rose in 45 states. Over the last year, the gains have been equally powerful, with 44 states reporting net job growth. Keep in mind that these payroll jobs numbers suffer from undercounting, due to turnover declines after 9/11 and ignoring the new workforce of self-employed consultants[1]. That means the rise in payroll jobs is even more impressive and represents much higher gains.

 

The four states with the largest monthly increases in absolute terms are Florida, North Carolina, Missouri, and Michigan, with an average gain of 22,000 jobs each. Of the five states in which employment declined, none lost more than 2,000 jobs.

 

Lower Unemployment is the Big Surprise

However, the biggest surprise in today's report was the dramatic drop of the unemployment rates in a handful of large, northern states. Michigan's unemployment rate is 6.1 percent, a drop of 0.8 percent from March's 6.9 percent. Minnesota's rate fell by 0.7 percent; Maine's by 0.6 percent. Wisconsin, Oregon, and South Dakota each had 0.5 percent drops.

 

These monthly changes are part of a deeper, positive trend; Michigan's unemployment rate, for example, has declined by 1.2 percent over the last year. Oregon's rate of unemployment has declined by almost 2 full percentage points. This trend is important because naysayers argue that dropping unemployment rates are a misleading reflection of a contracting, discouraged labor force, which is untrue. The labor force has expanded over the year in all the states listed above.

 

A few states saw unemployment rates rise over April, notably Mississippi by 0.8 percent; yet Mississippi's unemployment rate remains 1.8 percent lower than in April 2003.

 

A complete listing of all the states is available here.

 

Rea Hederman is a Senior Policy Analyst, and Tim Kane, Ph.D., is Research Fellow in Macroeconomics, in the Center for Data Analysis at The Heritage Foundation.



[1] See "Diverging Employment Data: A Critical View of the Payroll Survey," by Tim Kane, Ph.D., Center for Data Analysis Report No. 04-03, March 4, 2004.

About the Author

Rea S. Hederman, Jr. Director, Center for Data Analysis and Lazof Family Fellow
Center for Data Analysis

Tim Kane, Ph.D. Visiting Fellow
Center for Trade and Economics (CTE)

Related Issues: Economy