Despite all the positive news in the media about the American job market, things in some states aren’t looking as good. New figures from the Department of Labor have revealed some noteworthy trends in two key states. Let’s take a look.
Troubling Trends in Michigan and Missouri
While the labor market looks good for many, things aren’t going so well for those in Michigan and Missouri. According to new data, both these states saw increases in people filing for unemployment insurance benefits in the last month.
These figures are the latest in a growing trend as states across the U.S. have been grappling with job losses – for example, in Connecticut, Washington, and Rhode Island, which have all seen an uptick in unemployment of around 0.2% in the last few months.
National Concern
In February, the national unemployment rate hit 3.9%, up .2% from January, prompting fears that it may exceed 4% for the first time in over two years. Michigan saw 1,443 new jobless claims being filed, while Missouri saw 1,204.
These job losses have hit the automobile industry and the manufacturing sector the hardest. Both sectors are currently having to lay off portions of their workforce due to production and contract issues.
General Motors (GM) in Michigan has delayed production on two new all-electric pickups, which has meant they’ve had to lay off almost 1,400 employees from two plants: the Orion Assembly facility and the Lansing Grand River Assembly/Stamping plant.
They’d previously announced plans to lay off 1,314 workers just before Christmas, with layoffs occurring this month.
Layoffs Loom Over Michigan Plants
GM cut 900 jobs at Cruise, its self-driving arm, in February—about 24% of its workforce. In Missouri, layoffs hit the Missouri Central Bus Company (MCB) early after it terminated its contract with the district.
According to the school district, the company wanted an extra $2 million despite not having hit any performance goals for the last three semesters. MCB’s regional manager stated that the money was needed “to address unprecedented industry inflation and a nationwide school bus driver shortage.”
This was a strained relationship, which was worsened after a mass bus driver walkout over alleged racism at the company. The end of this contract means the loss of 332 jobs for full-time and part-time employees. However, the district is looking for a new vendor with the hopes that laid-off bus drivers may be hired.
The Student Transportation of America bus company in Kansas is also planning to lay off around 150 employees in the next few months after losing a contract to Zum – a company bankrolled by investment firms.
Industry Turmoil
Other sectors have already announced a spate of layoffs, with employees in biotech, Big Tech, and food manufacturing taking the hit. Despite all this doom and gloom, Biden attested that “America once again has the strongest economy in the world” in his 2024 Economic Report of the President, which was released last week.
“A record 15 million jobs have been created on my watch,” Biden wrote, adding, “The unemployment rate has been below 4 percent for the longest stretch in over 50 years.”
Data from the Department of Labor corroborates this, as figures are still below projections despite a rise in unemployment claims. Some experts worry that there may be an incoming rise in unemployment, causing recently laid-off workers to struggle to rejoin the workforce.
Experts Warn of Incoming Rise in Unemployment
They point to signs like companies announcing layoffs and more people searching online about losing their jobs as indicators for this. Whether this will all cause the U.S. labor market to slow down remains to be seen, but if it does, it could prompt the Federal Reserve to cut interest rates to help boost economic activity, create jobs, and reduce unemployment.
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