If the dramatic decline in the stock market in recent days wasn’t enough, the financial outlook for the state just got bleaker.

Michigan’s unemployment rate rose to 8.9 percent in August — the highest it’s been since 1992 — according to a monthly report released yesterday. Until August, the unemployment rate had been steady at 8.5 percent for the past three months, the worst in the nation. The national jobless rate for August is 6.1 percent, up from 5.7 percent in July.

The state lost another 20,000 manufacturing jobs last month. Michigan has 40,000 fewer manufacturing jobs since last year.

With economic anxiety rising, presidential candidates John McCain and Barack Obama scrambled Wednesday to adjust their messages to connect with voters who are struggling financially.

McCain, the Republican nominee, toured Michigan yesterday, promising to help revitalize Michigan’s economy if elected president.

At a campaign rally in Grand Rapids, he said he and running mate Sarah Palin would help recapture the state’s image as the world’s automotive capital.

“The working people of this great state of Michigan are the hardest working, the best skilled, the most productive, the most competitive in the world, and they are the backbone and the foundation of our economy,” he said.

While speaking to about 100 workers at the Orion Township plant in Oakland County, he said he backed a plan in Congress to give automakers $25 billion in federal loans to help them retool cleaner cars, a package he’d previously looked at with a skeptical eye.

Obama, the Democratic nominee, also supports the loan plan and has said he would back $50 million in loans, if needed. On Monday, Democratic vice presidential nominee Joe Biden toured the Mazda Motor Corp.-Ford Motor Co. joint auto assembly plant in Flat Rock, telling workers and managers that the auto industry is crucial to America’s economic future.

“The management, the rank-and-file workers — this is what built the middle class in America. We let these jobs go, well, shame on us. Shame on us,” he said.

During McCain’s visit, Democrats were reminding Michigan voters of the ways they say McCain would be bad for the economy. They brought Harley-Davidson motorcycle riders and drivers of American-made hybrid cars to Grand Rapids to criticize the Arizona senator for opposing many “Buy American” proposals.

Sen. Debbie Stabenow (D–Mich.), an Obama supporter, told reporters in a conference call yesterday that it was “an insult” for McCain to talk about helping workers when he supports trade policies that have cost the state jobs.

Stabenow also criticized what she called his sudden get-tough policy on Wall Street firms, noting that McCain has called himself a “deregulator” in the past who “wants government out of the way” and has opposed more regulation for the financial sector.

“There is absolutely no reason that we can’t continue to be the manufacturer of these products … if we have a president who gets it,” Stabenow said.

Republican U.S. Rep. Candice Miller, of Macomb County’s Harrison Township, said in a conference call that McCain’s comments were a signal to President Bush and Republicans on Capitol Hill that supporting the $25 billion loan program for the domestic automakers is a good idea.

“It really is pivotal in making a reality these $25 billion in auto loans that we must do,” Miller said.

Donald R. Grimes, a senior research associate at the University’s Institute for Labor & Industrial Relations and an expert on the Michigan economy, said the rise of the state’s unemployment rate isn’t a surprise — and the percent of jobless workers isn’t likely to decline anytime soon.

He said the sudden jump could be attributed to the recent extension on unemployment insurance benefits in the state, so people who previously claimed “self-insured” may now be identifying as unemployed to claim those benefits.

“Clearly, we’re not at the end of this economic downturn,” Grimes said.

— Daily Staff Reporter Julie Rowe, Daily News Editor Kelly Fraser and The Associated Press contributed to this report.

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