Unemployment rate: Michigan, Nevada trade places as No. 1 jobless state

Unemployment rate is now highest in Nevada at 14 percent, while Michigan falls to No. 2.

For the first time in four years, Michigan does NOT have the highest unemployment rate in the United States. That dubious distinction now belongs to Nevada.

Michigan's labor force grew. And its unemployment rate fell – from 14 percent in April to 13.6 percent in May, according to recent Department of Labor report. These are all signs that the recession in manufacturing, which hit Michigan early and hard, has given way to a recovery that looks stronger than most other parts of the economy.

Unemployment at 13.6 percent is nothing to brag about, but it's better than the 14 percent in Nevada, the new No. 1 in unemployment among the states. And the trends don't look so good in Nevada.

Its labor force has been shrinking, which usually helps suppress official unemployment counts. Nevertheless, unemployment shot up compared with 13.7 percent in April.

One reason for the difference is that manufacturing tends to recover early after a recession, while services (like Nevada's big tourism and hospitality industries) tend to recover later.

Nevada also entered recession later. In May 2006, when Michigan unemployment was already leading the nation in unemployment (6.8 percent), Nevada was still chugging along at a healthy 4.3 percent.

Nevada holds one other dubious title among the states: It has the nation's highest foreclosure rate. But in May, that rate fell 12 percent from April, according to a RealtyTrac report. Michigan has the fifth highest foreclosure rate, which increased 6 percent over the same period.

Unemployment tends to make foreclosure worse, so it's unlikely the two states will trade places anytime soon.

Still, it's a reminder that the recession and the housing debacle have hit virtually every corner of the US, even if the timing differs by region and state.