UM Releases Updated Economic Outlook

Substantial economic disruption has occurred since the University of Michigan’s RSQE released economic outlooks for the U.S. and Michigan economies in February 2020. Today, they released an updated set of interim forecasts has been released, which includes two scenarios – a short-lived contraction in economic activity or an “effective mitigation scenario” and a “prolonged fallout scenario”.  The analysis is based on the Congressional Budget Office’s (CBO’s) 2005 study “A Potential Influenza Pandemic: Possible Macroeconomic Effects and Policy Issues.”

View the full analysis or read a summary below:

RSQE expects an official recession to be declared in both scenarios considered. It remains possible for events to unfold in a more positive direction than the two scenarios.

GDP

On an annual basis, the United States real GDP growth in 2020 registers approximately  0.5  percent in the effective mitigation scenario and negative  1.8  percent in the prolonged fallout scenario, or roughly four percentage points lower than in the February outlook.  The level of real  GDP  in the effective mitigation scenario catches up to the previous forecast level by mid-2021, but in the prolonged fallout scenario, it runs substantially below the previous forecast level throughout the forecast horizon.

Employment

In the effective mitigation scenario, Michigan’s payroll employment count declines by approximately 155,000 jobs from the first to third quarters of 2020. In the prolonged fallout scenario, the decline is 400,000 jobs. Although in the former scenario, the state’s job count returns to its forecast path from the previous forecast by early 2022, it remains well below the previous expectations in the latter scenario.

Unemployment Rate

In the effective mitigation scenario, Michigan’s unemployment rate rises from 4.1 percent in 2019 to 5.8 percent in 2020, before declining back to  4.5  percent in  2021.  In the prolonged fallout scenario,  the state’s unemployment rate jumps to 8.1 percent in 2020 and 8.8 percent in 2021 before beginning to decline; it reaches a peak quarterly rate of 10.0 percent in the third quarter of 2020.

Key Points

  • There is limited economic information available, and the situation is evolving quickly.
  • Protecting people’s lives at the expense of short-term economic pain is justified on public health grounds and by long-term economic logic.
  • It is imperative for the federal and state governments to mitigate the pandemic’s economic damage to vulnerable people’s livelihoods.

View the full analysis.

Southeast Michigan job demand in Q4 2013 double that of Q4 2012

The Workforce Intelligence Network of Southeast Michigan (WIN) today released its job market trends report for the 4th quarter of 2013. In the nine county region including Genessee/Shiawasee; Monroe; Livingston; Macomb; Oakland; St. Clair; Washtenaw; and Wayne, demand for jobs based on online postings doubled from 53,306 in Q4 2012 to 112,940 in Q4 2013 – an overall growth of 111.9% year to year.

Fourth quarter (Q4) 2013 job demand was below third quarter (Q3) 2013 levels; however, third quarter numbers were part of a six-month period of record high job demand levels that continued at a more modest rate in Q4 2013. The full report can be viewed at http://win-semich.org/data-research/quarterly-reports/.

Said WIN Executive Director Lisa Katz: “We are looking forward to this demand for workers to continue and affect positive changes in hiring and growth in the labor force.”

For Q4 2013, WIN also found the top occupational clusters to be:

• Retail and Hospitality (28,591 postings, 198 percent growth over Q4 2012)
• Information Technology (12,498 postings, 46 percent growth over Q4 2012)
• Healthcare (12,427 postings, 109 percent growth over Q4 2012)
• Engineers and designers (7,014 postings, 37 percent growth over Q4 2012)
• Skilled trades and technicians (2,726 postings, 32 percent growth over Q4 2012)

And the top in-demand jobs:

• Retail Salespersons (4,181 postings)
• Software Developers (3,982 postings)
• Sales Representatives, Wholesale and Manufacturing (3,483 postings)
• Registered Nurses (3,445 postings)
• Heavy and Tractor-Trailer Truck Drivers (2,479 postings)