UM forecasts Michigan will add 132,600 jobs in 2015-16
Job growth in Michigan will continue for the next two years, according to a new survey released Friday morning from University of Michigan economists, with the state recovering about half the jobs it lost between 2000 and 2009, and returning to a level of employment last seen at the end of 2006.
After dropping from 8.8 percent last year to an expected rate of 7.4 percent this year, the state jobless rate will slowly continue to improve, declining to an estimated 6.8 percent during 2015 and 6.4 percent by the end of 2016, according to according to economists from the Research Seminar in Quantitative Economics in the UM Department of Economics.
"If our forecast proves correct, Michigan will have added 462,600 jobs from the bottom of the downturn in the summer of 2009 through the end of 2016," economists Joan Crary, George Fulton, and Donald Grimes write in the forecast. "That would recoup over half of the jobs lost from the spring of 2000 to the summer of 2009, returning the job count to its level posted at the end of 2006."
The economists project the state will end this year adding 36,000 jobs this year, down from the 69,000 jobs added during 2013. The pace of job growth will pick up, however, with projected gains of 59,400 jobs during 2015 and 73,200 during 2016. The forecast also sees that state labor force will continue to expand at a moderate pace for the next two years.
With those improvements, the number of employed workers in the state would climb to 4.3 million by the end of 2016, still well below the nearly 4.7 million jobs that state had in mid-2000.
For the state's essential auto industry, the forecast sees Detroit three automakers holding 44.4 percent of 2014 at the 44.4 percent of all U.S. light vehicle sales, increasing to 44.8 percent by 2016. The projections for total sales by Detroit carmakers increases from 6.9 million units last year to 7.3 million in 2014, an increase of 400,000 units. The rate of gains will slow for the next two years, adding a total of 300,000 vehicles to total 7.6 million units sold by Detroit manufacturers by 2016.
The sales levels will also support continued bonuses to unionized autoworkers. The forecast sees the lump-sum payments averaging about $6,000 per worker in 2015 and $1,400 in 2016.
Locally, inflation is expected to remain low in Metro Detroit, at a rate of 1.4 percent this year, 1.1 percent for 2015 and 1.4 percent for 2016.
U-M released its national economic outlook Thursday, which sees the U.S. economy growing grow at its fastest pace in a decade next year, while the national unemployment rate drops to the official full employment level of 5 percent by the end of 2016. That would leave Michigan with a significant gap of 1.4 percentage points worse than the national average.
The survey estimates that the rate of growth for the country's gross domestic product will jump from 2.2 percent this year to 3.1 percent in 2015 and 3.3 percent in 2016. It sees gas and oil prices remaining stable and national inflation remaining below 2 percent.
U.S. new-home construction will continue to rise from 1 million units this year to more than 1.2 million next year and nearly 1.5 million in 2016. Sales of existing single-family homes are expected to increase from less than 4.4 million this year to nearly 4.7 million in 2015 and about 4.8 million in 2016.
The Michigan economic forecast also looks back to see how accurate it's been in past years. The survey predicted a 1.7 percent gain in wage and salary employment for this year, but expects to see only 0.7 percent. In both the 2012 and 2013 forecasts, the survey underestimated the rate of job gains. In 2012, the survey expected 0.8 percent growth but the state delivered an improvement of 2.1 percent. For 2013, the gain was expected to be 0.9 percent but actually turned out to be 1.8 percent.