A respected University of Michigan study offers mixed news in its newest projections on the state’s economy.
The report comes from U of M’s Research Seminar in Quantitative Economics. It says, overall, net personal income in the state will likely remain steady with the expectation that any growth in earnings will probably be eroded by inflation and taxes.
The report says there are bright spots in its Michigan outlook.
“Supply chain shortages have plagued the auto industry during the recovery from the pandemic recession,” it says, “but the resulting backlog of demand may prove to be a silver lining as the economy cools.”
The move into electric vehicles should keep the demand for labor high. Auto manufacturers plan big investments on assembly plants and battery plants. There’s a “but” however:
That is not to say that we expect a smooth ride ahead—the strong dollar is likely to hurt Michigan’s non-automotive manufacturing activity, while skyrocketing mortgage rates appear ready to slam the brakes on residential construction activity. Nonetheless, if the auto industry is able to avoid major potholes ahead, it could end up towing the state’s labor market forward along with it.
The RSQE report came out the same day as the Michigan Department of Technology, Management and Budget released its October jobs data. Those numbers showed Michigan’s seasonally adjusted unemployment rate edged up ever so slightly by 0.1 % to 4.2 %.
“The uptick in Michigan’s jobless rate reflected a minor workforce reduction over the month,” said Wayne Rourke, associate director of the Bureau of Labor Market Information and Strategic Initiatives. “However, payroll jobs edged up slightly since September.”
The new number is slightly higher than the national rate of 3.7 %, which is also a small increase from the previous month.
The biggest jobs gains from this point last year were in the professional and business services sector and trade, transportation and utilities.
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