Midwest Manufacturing Leads Job Recovery
Life + Money

Midwest Manufacturing Leads Job Recovery


Although this week’s unemployment report disappointed investors, the slow but steady growth of jobs throughout the country is cause for encouragement: Employers in 35 states and the District of Columbia added jobs in January, their best hiring month since October, according to a new Labor Department report. The strongest month-over-month employment gains occurred in the industrial Midwest, including Michigan, Ohio and Illinois. Michigan added 39,700 jobs, while Ohio and Illinois added 31,900 and 24,500, respectively. The Midwest also recorded one of the lowest regional unemployment rates of 8.5 percent.

Michigan, Ohio and Illinois are only now starting to rebound after years of unemployment rates well above the national average. Michigan’s unemployment rate dropped to 10.7 percent in January, down from 13.7 percent a year ago. Ohio’s unemployment rate also fell from 10.6 percent to 9.4 percent over the last year.

“The rebound in manufacturing throughout the Midwest is a positive outcome, suggesting the region will regain a foothold early this year,” said Alexander Miron, economist with Moody’s Analytics. Manufacturing is one of the few industries rapidly adding jobs, though the industry isn’t nearly as big as it once was.

Another piece of good news came earlier this week when the Obama administration announced a $4.5 million partnership between the private sector and the government to help boost manufacturing jobs and opportunities in the Midwest.

Meanwhile, unemployment rates dropped in 24 states, 10 states reported increases, and 16 states and the District of Columbia had no change in January. By comparison, December unemployment rates fell in 15 states and rose in 20. The national unemployment report dropped to a 22-month low of 8.9 percent in February.

“The drop is more associated with the decline in the labor force as opposed to real job creation,” said Michael Brown, economist with Wells Fargo, adding, “There is still job creation going on. It’s just not as fast as the drop in the labor force participation.” The labor force includes anyone who is employed or unemployed, age 16 or over; it’s gradually declined since 2000. Brown said the low labor force participation rate stands at a non-seasonally adjusted 2.1 million, a slight decline from one year ago.

Related Links:
Unemployment Fell in 24 U.S. States (Bloomberg Businessweek)
Texas Employers Posted Job Gains in January (San Antonio Business Journal)