Michigan/Indiana Labor Market Review Summary — September 2026

September 11, 2026

Jacqueline Barton

As we move into fall, the labor market continues to send mixed signals. Hiring remains active, but employers are becoming increasingly selective and intentional with their hiring decisions. Across many of our client conversations, the challenge is not finding applicants. It is finding the right people for skilled and difficult-to-fill positions.

President’s Perspective

One of the most common questions we hear is whether the labor market is softening. The answer is yes, but only in certain areas. While hiring activity has moderated from the peaks of the past several years, employers are still competing for skilled talent, particularly in manufacturing, engineering, skilled trades, and leadership roles. The challenge has shifted from finding people to finding the right people.

Labor Market Dashboard | Month-over-Month Trends

State & Local	June 2026	July 2026	Trend
Indiana Unemployment	3.6%	3.6%	↔
Elkhart County	3.8%	4.1%	↑
St. Joseph County	4.1%	4.2%	↑
Michigan Unemployment	5.0%	4.9%	↓
Berrien County	4.3%	4.5%	↑
Kalamazoo County	4.5%	4.6%	↑
Calhoun County	5.1%	5.8%	↑
Michigan Labor Force Participation	59.5%	59.1%	↓
National – U.S. Labor Market	July 2026	August 2026
U.S. Unemployment	4.1%	4.1%	↔
U.S. Jobs Added	-23,000	+162,000	↑
Wage Growth	3.2%	3.1%	↓

Please Note: State and regional labor market data reflects July 2026 activity released in August and September, while national labor market information reflects the August 2026 Employment Situation released on September 4, 2026.

Key Insights

Regional unemployment rates increased modestly in several local markets, but employment levels remain healthy and above year-ago levels in many areas. Hiring remains active, though employers are becoming more selective and strategic when adding headcount.

Indiana | July 2026

Unemployment

Indiana unemployment remained at 6%, unchanged from June.
Indiana continues to maintain a relatively tight labor market compared with many neighboring states.

Elkhart-Goshen MSA

Unemployment Rate: 1%, up from 3.8% in June
Labor Force: 100,286
Employed: 96,128
Total Nonfarm Employment: 130,300
Despite a monthly decline in payroll employment, total nonfarm employment remained 1% higher than July 2025, while manufacturing employment was 4.0% above last year’s level.

South Bend-Mishawaka MSA

Unemployment Rate: 2%, up slightly from 4.1% in June
Labor Force: 153,508
Employed: 147,091
Unemployed: 6,417

One local trend we will continue to monitor is manufacturing. Manufacturing accounted for 52.3% of unemployment insurance claims in Indiana Region 2 during July, reinforcing the significant impact this industry continues to have on our regional workforce.

Michigan | July 2026

Unemployment

Michigan unemployment improved to 9%, down from 5.0% in June.
Michigan added 7,500 net payroll jobs in July.
Private-sector payroll employment increased by 6,900 jobs.
Labor force participation declined from 59.5% to 1%, an important indicator of long-term workforce availability.

Kalamazoo-Portage MSA

Unemployment Rate: 6%, up slightly from 4.5% in June
Labor Force: 129,500
Employed: 123,500
Unemployed: 6,000
Although unemployment increased modestly month over month, it remains below the 4% recorded in July 2025.

Battle Creek MSA

Unemployment Rate: 8%, up from 5.1% in June
Labor Force: 60,300
Employed: 56,800
Unemployed: 3,500
Despite the monthly increase, unemployment remains below the 7% rate recorded one year ago.

Michigan’s regional data also serves as a reminder that seasonality matters. Payroll jobs declined across many Michigan metro areas during July, driven in part by seasonal education reductions and temporary auto-related layoffs.

U.S. Labor Market Snapshot | August 2026

S. unemployment remained at 4.1%.
Employers added 162,000 jobs in August, a substantial improvement from July.
June and July employment estimates were revised upward by a combined 55,000 jobs.
Job gains were concentrated in food services, drinking establishments, and local government education, while information employment declined.
Average hourly earnings increased 1% year over year.

The August report reinforces the mixed nature of today’s labor market. Hiring activity continues, layoffs remain relatively low, and employers are still creating jobs. However, businesses appear to be increasingly deliberate about when and where they add headcount. Weekly initial unemployment claims recently stood near 206,000, another indication that widespread layoffs have not emerged.

What This Means for Employers

Do Not Look at Unemployment in Isolation: An increasing unemployment rate can occur even when employers are adding jobs, or when more individuals enter the labor force.

The Market for Quality Talent Remains Competitive: A more balanced labor market does not necessarily mean highly qualified candidates are easier to find.

Manufacturing Remains Critical in Our Region: Elkhart-Goshen manufacturing employment remains above last year’s level, but manufacturing also accounts for a significant share of local unemployment claims and deserves continued attention.

Labor Force Participation May Be the Bigger Story: Michigan’s declining participation rate highlights an important reality: workforce availability can become a recruiting challenge even when unemployment appears elevated.

Hiring Speed Still Matters, But Hiring Quality Matters More: Organizations that move efficiently while maintaining competitive compensation, positive candidate experiences, strong onboarding, and effective retention practices will continue to have a measurable advantage.