ANN ARBOR — Michigan will see another two years of job growth, though not at the breakneck pace of late 2014 and early 2015, according to the latest economic forecast from the University of Michigan’s Research Seminar in Quantitative Economics.
Job growth is forecast to remain at an average rate of 1.4 percent through the third quarter of 2016, rising to 1.5 percent during the first half of 2017, and averaging 1.6 percent in teh first half of 2017, before trending downward in the second half of 2017.
That translates into 84,000 new Michigan jobs for all of 2015, 61,100 in 2016, and 64,800 in 2017, UM economists said.
Manufacturing powered Michigan’s strong job growth during the recent recovery, but in this slower-growth stage it’s predicted to produce only one out of every 12 new Michigan jobs in the next two years. Professional and services jobs will generate the largest share of the jobs, about 25 percent — and 60 percent of those job sill be in the technical, scientific and professional subgroup. The consturction industry will contribute about 13 percent of new jobs in the two-year period, as residential construction is predicted to pick up steam.
Michigan’s total job number by the end of 2017 will return to its level in the spring of 2003, at the outset of Michigan’s nearly decade-long economic slippage.
Personal income, maenwhile, is predicted to rise at a 4.1 percent clip in 2015, rising to 4.4 percent in 2016 before ticking back to 4.3 percent in 2017.
Real disposable income (personal income adjusted for taxes and inflation) is predicted to spike to a growth rate of 5 percent in 2015, reflecting the decline
in local prices. Real disposable income growth falls back in 2016 to 2.8 percent with the return to modest inflation, and slows further to 1.7 percent in 2017 with the acceleration in inflation, slightly weaker nominal income growth, and a larger
increase in federal personal taxes.
Nationally, the economists predict 2015 real GDP growth will be 2.4 percent, the same as 2014’s, with a stronger domestic recovery held back by sluggish growth in U.S. trading partners. Wage growth is predicted to pick up again, and the auto and housing markets are healthy. GDP growth is expected to rise to 2.6 percent in 2016 and 2.9 percent in 2017. Inflation, virtually zero now due to a collapse in oil prices and a stronger U.S. dollar, is predicted to rise to 1.6 percent in 2016 and 2.3 percent in 2017. Light vehicle sales, at 16.4 million in 2014, are predicted to rise to 17.4 million in 2015, 18 million in 2016 and 18.1 million in 2017. The federal deficit is predicted to be stable all three years at about $600 billion. That’s 3.7 percent of GDP in 2015 and 2016, and 3.6 percent in 2017.