The state's seasonally adjusted jobless rate for March was half a percentage point below the level of 9 percent in March 2012, according to the Department of Technology, Management & Budget.
Nationally, the unemployment rate was 7.6 percent in March, down from 7.7 percent in February.
"The state's unemployment rate in March was the lowest recorded since mid-2008, and payroll jobs this year are the highest since the fourth quarter of 2008," said Michael Williams, acting director of the Bureau of Labor Market Information and Strategic Initiatives.
The state said the number of Michiganians unemployed and seeking work fell 14,000 to 396,000 over the month. It said the number of people working rose 17,000 to 4.261 million.
Michigan's jobless rate has been heading generally downward since the summer of 2012, falling eight-tenths of a point since August, the department said. It said March was the first month during which the number of unemployed has been under 400,000 since June 2008.