June 18, 2008 / 9:30 PM / 9 years ago

Michigan jobless rate jumps in May

DETROIT (Reuters) - Michigan's unemployment rate jumped to 8.5 percent for May, the highest jobless rate in 16 years for a state that has been hardest hit by the combined downturn in the U.S. auto industry and the slump in housing.

The Michigan unemployment rate, up from 6.9 percent in April, was three percentage points higher than the national rate of 5.5 percent for the month.

The weak Michigan economy is expected to dominate the presidential campaign in a swing state seen critical to the November U.S. election.

Part of the surge in the jobless rate for the month reflected the presence of students looking without success for summer jobs in the work force, state officials said.

"This is an unusually large monthly shift in the jobless rate, so additional months of data will be needed to see if this higher jobless rate is sustained," Rick Waclawek, director of the state agency charged with tracking employment data ,said.

The Detroit area, including the suburbs of Livonia and Warren, posted an unemployment rate of 9.3 percent on the seasonally adjusted basis tracked by the state.

The overall state unemployment rate was the highest since October 1992, when the Detroit-based auto industry was struggling to rebound from the recession that ended the year before.

Comparisons with other states were not immediately available. In April, Michigan had the highest unemployment in the nation, followed by Alaska at 6.7 percent.

Over the past year, Michigan has lost 47,000 jobs in manufacturing and another 15,000 jobs in construction, state data showed.

More job losses are on the way. One of the state's largest employers, Dearborn, Michigan-based Ford Motor Co, plans to cut 15 percent of its salaried expenses with white-collar job cuts that will take effect by August.

Michigan, along with Ohio, Florida and about a dozen other states are seen as battleground states that could vote either Republican or Democratic in the presidential election.

Reporting by Kevin Krolicki; Editing by Leslie Adler

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