Unemployment rate higher than believed due to federal statistical error

Michigan’s unemployment rate fell in October, but the federal government corrected a statistical error that made the state’s unemployment rate look better in September.

The state’s unemployment rate actually increased in September by 1.7 percentage points, from the originally reported unemployment rate of 4.6% to 6.3%.

The increased rate is above the national average.

The U.S. Department of Labor reported that in the week ending Nov. 13, initial unemployment claims decreased nationally by about 1,000 from the previous week to 268,000 claims — the lowest level of claims since March 14, 2020, when 256,000 claims were filed.

The previous week’s claims were revised by up to 2,000, from 267,000 to 269,000.

Data released Wednesday by the Michigan Department of Technology, Management & Budget (DTMB) showed that Michigan’s seasonally adjusted unemployment rate for October decreased by two tenths of a percentage point, to 6.1%. The national unemployment rate is 4.6%.

Michiganders filed 9,645 first-time jobless claims the week of Nov. 13, an decrease from 12,958 firsttime claims the prior week.

The number of Michiganders filing continuing unemployment claims decreased by 7,636, from 50,760 claims the week of Oct. 30 to 43,124 claims the week ending Nov. 6.

Total employment statewide increased by about 6,000, and unemployment moved down by about 7,000.

Michigan’s workforce remained unchanged, DTMB said.

According to U.S. Bureau of Labor Statistics, the statistical error in September was due to “distortions” in data input for the DetroitWarren-Dearborn metropolitan area for January. State officials reportedly notified BLS in May of errors.

“Despite the upward revision in September’s unemployment rate, the new data shows that Michigan’s jobless rate has fallen substantially over the past year from 8.1% to 6.1%,” said Scott Powell, director of the Bureau of Labor Market Information and Strategic Initiatives. “The unemployment rate revisions by the BLS are a necessary part of the statistical estimation process to ensure accuracy.”

The state’s top job classifications in October for new jobless claims were:

• Unclassified: 1,731 claims (this would include crop and animal production, rail transportation, poster service, pension, health, welfare, and vacation funds, trusts, estates, and agency accounts, office of notaries, private households, and public administration)

• Manufacturing: 1,317 claims

• Construction: 1,121 claims

• Administration and support, waste management and remediation services: 935 claims

• Accommodation and food services: 692 claims

• Healthcare and social assistance: 671 claims

• Wholesale trade: 667 claims

• Retail: 597 claims DTMB said that due to the statistical error, additional revisions will need to be made during a normal end-of-year review for the unemployment rate between January and August. Revisions are expected to increase the unemployment rates for each month.