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Michigan/Indiana Labor Market Review Summary — May 2026

May 15, 2026

Jacqueline Barton

Hello Friends,

I hope this message finds you well and that your spring season is off to a strong start. As always, we truly appreciate the conversations many of you continue to have with our team regarding hiring trends, workforce planning, retention strategies, and the overall economic outlook across our region.

First, a quick note and thank you for your patience. There was a temporary delay in the release and reporting of labor market data, which caused us to pause distribution of our Labor Market Review over the last couple of months.

Attached are our latest Labor Market Review highlighting March 2026 data with May 2026 reporting for Indiana, Michigan, and national labor market trends.

Executive Summary:
March data reflects a labor market that continues to stabilize across much of the Midwest. Indiana remains one of the strongest labor markets in the country with unemployment levels continuing to trend below national averages, while Michigan is showing moderate improvement in unemployment rates despite softer labor force participation and overall employment levels. Hiring activity nationally remains selective and measured, with employers continuing to balance growth, labor costs, and economic uncertainty heading into summer.

Please note: State-level data reflects March 2026 activity (released in May 2026), while national economic and labor indicators reflect the most current information available at the time of this reporting.

Indiana – March 2026

Unemployment

  • Indiana unemployment rate: 3.6% (↓ from 3.8% in February)
  • Indiana continues to outperform many Midwestern states with one of the tighter labor markets in the region.

Elkhart–Goshen MSA

  • Unemployment rate: 3.5% (↓ from 3.6% in February | ↓ from 4.0% in March 2025)
  • Total nonfarm employment increased to 132,900
  • Manufacturing employment remains stable with continued strength in transportation equipment manufacturing and professional/business services.

South Bend–Mishawaka MSA

  • Unemployment rate: 4.0% (↓ from 4.2% in February | ↓ from 4.5% in March 2025)
  • Total nonfarm employment increased to 138,500
  • Professional & Business Services, Leisure & Hospitality, and Local Government showed modest month-over-month gains.

Industries showing strength:

  • Construction
  • Manufacturing
  • Professional & Business Services
  • Leisure & Hospitality
  • Local Government & Educational Services

Industries remaining softer:

  • Transportation/Warehousing
  • Retail Trade
  • Select healthcare and government segments

Michigan – March 2026

Unemployment

  • Michigan unemployment rate: 5.1% (↓ from 5.3% in February | ↓ from 5.5% in March 2025)
  • Michigan payroll jobs increased by approximately 17,000 during March.
  • Labor force participation and overall employment levels continue to remain softer year-over-year in several regions.

Kalamazoo-Portage MSA

  • Unemployment rate: 4.1% (unchanged month-over-month | ↓ from 4.7% in March 2025)
  • Labor force and employment levels remain below prior year levels, though unemployment continues to improve.

Battle Creek MSA

  • Unemployment rate: 5.2% (unchanged from February | ↓ from 5.9% in March 2025)
  • Labor conditions continue to stabilize, though hiring activity remains selective.

Niles/Berrien County MSA

  • Unemployment rate: 4.8% (↓ from 4.9% in February | ↓ from 5.7% in March 2025)
  • Continued improvement year-over-year in unemployment trends.

Industries showing strength:

  • Leisure & Hospitality
  • Professional & Business Services
  • Construction
  • Select Government sectors

Industries remaining softer:

  • Manufacturing
  • Retail Trade
  • Transportation-related sectors

U.S. Labor Market – Spring 2026 Snapshot

  • S. unemployment rate remained at approximately 4.3%
  • National hiring activity continues at a slower but stable pace
  • Wage growth remains positive but has moderated compared to prior years
  • Inflation continues to ease gradually, though the Federal Reserve remains cautious regarding future interest rate adjustments
  • Employers across many industries continue focusing on productivity, retention, and selective hiring strategies

What This Means for Employers

  • Indiana remains highly competitive for talent despite modest stabilization.
  • Michigan labor markets continue improving, though participation rates remain an area to monitor.
  • Employers who remain proactive in recruiting, retention, onboarding, and workforce planning will continue to have a competitive advantage heading into summer hiring.
  • Wage pressure remains present but more manageable than in the past several years.

Further Reading (Free & Public Sources)

 

If you would like to discuss how these trends may impact your workforce strategy, hiring plans, compensation structure, or overall business outlook heading into summer, we would welcome the conversation.

Thank you again for your continued partnership and trust.

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