A respected study from the University of Michigan offers mixed news in its latest projections for the state’s economy.
The report comes from the U de M research seminar in quantitative economics. It indicates that overall net personal income in the state is likely to remain flat, with the expectation that any revenue growth will likely 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,” he says, “but the resulting demand backlog could prove to be a silver lining as the economy is cooling down.
The shift to electric vehicles is expected to keep labor demand high. Automakers are planning big investments in assembly plants and battery factories. There is a “but”, however:
“That’s not to say we expect a smooth advance – the strong dollar is likely to hurt Michigan’s non-auto manufacturing activity, while soaring mortgage rates look poised to dampen construction activity. Nevertheless, if the auto industry is able to avoid the major potholes to come, it could end up dragging the state’s labor market with it.”
The RSQE report came out the same day Michigan’s Department of Technology, Management, and Budget released its October jobs data. These numbers show that Michigan’s seasonally adjusted unemployment rate edged up 0.1% to 4.2%.
“The rise in Michigan’s unemployment rate reflects a slight reduction in the labor force during the month,” said Wayne Rourke, associate director of the Office of Labor Market Information and Strategic Initiatives. “However, salaried employment has increased slightly since September.”
The new figure is slightly higher than the national rate of 3.7%, which is also a slight increase from the previous month.
The biggest job gains from this point last year were in professional and business services and in trade, transportation and utilities.