Economic forecasters at the University of Michigan released their economic forecast report on Friday morning. According to the Research Seminar in Quantitative Economics, the Michigan economy is set to break its record of the longest period of job growth since World War II. Across the country, however, RSQE forecasters expect rapid economic growth to fade by the second quarter of the year.
These findings, as well as further data regarding population and job growth, are included in their annual analysis of the national and state economies, headed by RSQE Director Gabriel Ehrlich. The report detailed uninterrupted job growth in Michigan spanning from the third quarter of 2009 to the third quarter of 2018. This nine-year streak is tied only with the period ranging from the spring quarter in 1991 to spring 2000.
According to the report, job growth in the state is expected to continue to increase over the next two years, adding 35,800 jobs in 2019 and 39,300 more in 2020. By the end of 2020, Michigan is expected to recoup four of every five jobs lost since the mid-2000s.
From 2010 to 2017, Michigan saw a 29 percent rise in the number of college-educated 25 to 34-year-olds moving to the state. International migration also contributed to this population growth, expected to make up 55 percent of the state population by 2025.
In a press release, Ehrlich said international migration has a growing impact on the state’s population and will continue to increase. A rise in college-educated residents could also accelerate popualation growth. According to the report, the state’s share of college-educated 25-to-34-year-olds rose by 29 percent from 2010 to 2017. 13 of the 16 largest cities in the state also surpassed the national average growth rate in young adults with at least a bachelor’s degree.
“International migration is an especially important driver of Michigan's population growth because without it, the state’s population aged 4 or younger is projected to shrink by 200,000 residents by 2025,” Ehrlich said.
Within the automotive sector, U.S. light vehicle sales are expected to decline in the next two years — Ford Motor Co., General Motors Corp. and Chrysler’s share of sales has decreased since last year, according to the report. Leading sectors included in the report for this year are construction, professional and business services and health services. Low unemployment rates have also contributed to Michigan’s recovering economy. The unemployment rate for the state this year averaged 4.4 percent and is projected to fall to 3.8 percent by 2020.
Zooming out to the national economic landscape, forecasters predict the benefits of President Donald Trump’s tax cuts will wear off in 2020, even as wage growth remains healthy.
“Wage growth—the one thing that had been missing from the full-employment labor market picture — finally appears to be picking up,” the report’s executive summary reads. “The October reading of average hourly earnings of workers in private nonfarm employment clocked in at a well-received 3.1 percent year-over-year rate, the first time since May 2009 that this measure of wage growth has exceeded 3 percent.”