As we enter the final quarter of 2026, many employers are finalizing budgets, evaluating staffing needs, and preparing for the year ahead. The latest labor market data continues to send mixed signals. While unemployment has improved in several local markets, workforce participation and national hiring trends raise important questions about labor availability heading into 2027.

This month’s Labor Market Review highlights August employment data for Indiana and Michigan, along with the newly released September national employment report.

President’s Perspective

One trend I believe deserves more attention is the difference between declining unemployment and a growing workforce.  A lower unemployment rate may appear encouraging, but it does not always mean more people are working. In Michigan, for example, unemployment improved in several local markets during August, yet the number of people participating in the workforce continued to decline.

Nationally, September’s employment report showed just 29,000 jobs added, along with downward revisions to previous months. While hiring has slowed, employers continue to face challenges finding qualified employees for skilled and specialized positions.

As we prepare for 2027, I believe employers need to look beyond unemployment rates and focus on workforce availability, employee development, and retention. The challenge is not simply filling positions today but building a dependable workforce for tomorrow.

The reports:

MICHIGAN
INDIANA

Labor Market Dashboard | Month-over-Month Trends

State & Local

National | U.S. Labor Market

August payroll employment reflects the revised estimate released October 2, 2026.

Please Note: State and regional labor market data reflects August 2026 activity, while national labor market information reflects the September 2026 Employment Situation released October 2, 2026. Statewide unemployment figures are seasonally adjusted; regional figures are not seasonally adjusted.

Key Insights

Indiana unemployment remained stable, while several local Michigan markets reported lower unemployment rates. However, labor force levels declined across all 18 Michigan labor market areas, with a median year-over-year decline of 6.8%.

National hiring remained subdued in September, but employers continue to report challenges finding qualified workers in manufacturing, technical, and supervisory positions. These trends reinforce the importance of looking beyond unemployment rates when planning for 2027.

Indiana | August 2026

Unemployment

• Indiana unemployment remained at 3.6%, unchanged from July.
• Economic Growth Region 2 unemployment declined from 3.9% to 3.8%.

Elkhart-Goshen MSA

• Unemployment Rate: 3.8%, down from 4.1% in July
• Labor Force: 99,456
• Employed: 95,672
• Unemployed: 3,784
• Total Nonfarm Employment: 132,200

Elkhart-Goshen added 1,600 payroll jobs in August, including 500 manufacturing jobs. However, manufacturing employment remains 1.8% below August 2025, reflecting continued adjustments in the region’s manufacturing workforce.

South Bend-Mishawaka MSA

• Unemployment Rate: 4.2%, unchanged from July
• Labor Force: 152,233
• Employed: 145,823
• Unemployed: 6,410

Manufacturing Update

Manufacturing accounted for 39.8% of unemployment insurance claims in Indiana Region 2 during August, down from 52.3% in July. While manufacturing remains the largest source of claims, this change is worth monitoring as employers evaluate production demands and workforce stability heading into 2027.

Michigan | August 2026

Unemployment

• Michigan unemployment increased slightly to 5.0%, up from 4.9% in July.
• Michigan lost approximately 2,200 net payroll jobs in August.
• Private-sector payroll employment declined by 3,200 jobs.
• Labor force participation declined from 59.1% to 58.8%.

Kalamazoo-Portage MSA

• Unemployment Rate: 4.5%, down from 4.6% in July
• Labor Force: 129,100
• Employed: 123,200
• Unemployed: 5,900

Battle Creek MSA

• Unemployment Rate: 5.3%, down from 5.8% in July
• Labor Force: 59,900
• Employed: 56,700
• Unemployed: 3,200

Niles / Berrien County

• Unemployment Rate: 4.8%, down from 4.9% in July
• Labor Force: 71,500
• Employed: 68,000

U.S. Labor Market Snapshot | September 2026

• U.S. unemployment increased slightly to 4.2%, up from 4.1% in August.
• Employers added 29,000 jobs in September, compared with a revised 133,000 jobs in August.
• July and August payroll estimates were revised downward by a combined 60,000 jobs.
• Labor force participation increased slightly to 61.8%, compared with 61.6% in August.
• Average hourly earnings increased 3.0% year over year.
• Healthcare added approximately 17,000 jobs, while construction and manufacturing employment changed little.

The September report reflects a more cautious national hiring environment, with modest job growth and downward revisions to previous months. However, slower hiring does not necessarily resolve the challenges employers face in finding skilled trades, technical, and leadership talent.

What This Means for Employers

Look Beyond Unemployment Rates: A declining unemployment rate does not always mean employment is growing. Labor force participation, actual employment levels, and industry trends provide a more complete picture of workforce conditions.

Workforce Availability Remains a Concern: Michigan’s continued decline in labor force participation highlights the importance of attracting individuals back into the workforce and developing existing employees.

Manufacturing Remains a Key Indicator: Elkhart-Goshen experienced monthly manufacturing job gains, but employment remains below year-ago levels. Employers should continue monitoring production demands, turnover, and workforce needs.

Make Retention Part of Your 2027 Budget: Replacing experienced employees can be costly. Investing in onboarding, employee engagement, leadership development, and retention can help organizations maintain workforce stability. 

Further Reading | Free & Public Sources

• Bureau of Labor Statistics | September 2026 Employment Situation
• Bureau of Labor Statistics | State Employment & Unemployment
• Hoosiers by the Numbers
• Michigan Labor Market Information
• Bureau of Economic Analysis

The workforce question heading into 2027 may not simply be whether unemployment rises or falls. It may be whether employers can successfully attract, develop, and retain the talent they need in a changing labor market.

We hope this month’s Labor Market Review provides valuable insight as you evaluate your workforce needs for the coming year. Thank you for continuing to trust Specialized Staffing Solutions as your workforce resource. We welcome your questions and, more importantly, the conversations these reports create.

Jacqueline Barton
President | Specialized Staffing Solutions