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Posted on Fri, Nov 18, 2011 : 9:30 a.m.

'Sustained recovery': U-M economists project Michigan to add 68,700 jobs over next 2 years

By Nathan Bomey

(This story has been updated several times.)

Michigan will add 68,700 jobs in 2012 and 2013, fueling a "sustained recovery" at a "subdued pace," according to projections released this morning by University of Michigan economists.

U-M economists projected that the state would add nearly 31,500 jobs in 2012 and 37,200 in 2013 after adding about 64,200 jobs in 2011.


University of Michigan economists George Fulton (seen here), Joan Crary and Don Grimes project that the state's unemployment rate will fall to 9.1 percent by the end of 2013.

Melanie Maxwell |

That would drive the state's average unemployment rate from 10.7 percent in 2011 to 10.4 percent in 2012 and 10 percent in 2013, according to the annual forecast conducted by George Fulton, Don Grimes and Joan Crary.

The rate, which averaged 13.3 percent in 2009 and 12.5 percent in 2010, is expected to fall to 9.1 percent by the fourth quarter of 2013.

The economists projected that the rate's decline would be slowed as discouraged unemployed workers decide to look for jobs again toward the second half of 2012.

"Now that Michigan's darkest days are in the books, much of today's news is positive," Fulton said. "The Michigan economy is gaining some forward momentum for the first time in a long while. We have a ways to go, to be sure, before we reach full economic health, but we've made a good start."

Michigan's unemployment rate fell from 11.1 percent in September to 10.6 percent in October, according to statistics released Wednesday by the state government.

The manufacturing sector is expected to account for about 27.3 percent of the new jobs over the next two years. The sector, which added 19,000 jobs in 2010 and 25,000 in 2011, is expected to add 21,000 over the next two years.

High-wage industries, defined as those where the average wage is more than $57,000, is the fastest-growing segment of Michigan's workforce. The number of high-wage jobs in Michigan rose 4.2 percent from the third quarter of 2009 to the third quarter of 2011, adding 38,867 jobs. The number of low-wage jobs rose 3.8 percent during the same period, increasing by 36,267 jobs.

The state's professional and business services sector is expected to add about 20,000 jobs over the next two years after adding 26,000 in 2010 and 20,000 in 2011, the economists projected. Powering part of the sector's rise is a "red-hot temporary help industry," the economists said.

Much of that growth was due to "the resurgent auto industry" hiring temporary workers, according to the economists' forecast.

"It turns out to be inaccurate to attribute Michigan's current job recovery to increases in local French fry production," Fulton said. "Indeed, for what it's worth, the more general industry category that contains fast-food restaurants has declined over the period."

The health services sector — which includes private hospitals but not the University of Michigan Health System, which is categorized as "state government" — is expected to add 9,000 jobs next year and another 9,000 in 2013.

Michigan residents' personal income, which rose by 3.3 percent in 2010 and 5.8 percent in 2011 in the aftermath of the auto industry's collapse, will continue to rise, increasing 3.0 percent in 2012 and 2.7 percent in 2013.

The government sector will experience job cuts over the next two years, the economists projected. The sector is expected to lose 8,000 jobs in 2012 and 2,500 in 2013 after cutting 10,800 jobs in 2011.

The economists cited the U.S. Postal Service's financial problems, reductions in the state's service sector and struggling municipalities and school districts as factors in the sector's decline.

The gradual recovery comes after Michigan lost 857,000 jobs from the spring of 2000 to the summer of 2009, according to the economists' report.

If the state continues to add jobs at the pace the economists project, Michigan would have 68,000 fewer jobs at the end of 2013 than it had at the end of 2008 due to the "unprecedented crash of 2009."

"Obviously we have much farther to go to make up the losses prior to 2009," the economists said in their report. "That's a great deal of ground to make up."

A key factor influencing the state's recovery is the gradual uptick in U.S. light vehicle sales. The auto industry is expected to sell 13.5 million cars to U.S. buyers in 2012 and 14.3 million in 2013. That's up from 10.4 million in 2009, 11.6 million in 2010 and 12.7 million in 2011.

In Washtenaw County, the unemployment rate was 6.6 percent in September, according to the state. That was down from 7.2 percent in August and reflected the fourth lowest rate among Michigan's 83 counties.

U-M projected in March that Washtenaw County would add 8,000 jobs in 2011, 2012 and 2013.

On Thursday, U-M projected that the U.S. economy's unemployment rate would fall from an average of 9 percent in 2011 to 8.9 percent in 2012 and 8.6 percent in 2013.

Fulton said today that the pace of the national economic recovery poses a "risk" to Michigan's recovery, too. If the U.S. economic sputters, Michigan would add fewer jobs than expected.

Contact's Nathan Bomey at (734) 623-2587 or You can also follow him on Twitter or subscribe to's newsletters.



Sat, Nov 19, 2011 : 11:52 p.m.

If the Rickster had not sold out to business, we would not be losing the 20000 decent paying public sector jobs. These people would actually be paying taxes and spending into the economy. I am expecting a large increase in my state taxes with subsequent reductions in my personal spending and job losses tied to my decrease in spending. It's really amazing that anyone would think adding taxes to the low and middle wage earners would not affect the state economy. Rick had to make some hard choices so his rich buddies could keep off-shoring their money to avoid paying taxes on it.


Sat, Nov 19, 2011 : 11:58 a.m.

The Rick Roaring economy marchs on. Snyder has given the public sector the needed shave and a haircut, slashed taxes, and finally we have a state that is becoming competitive and building wealth with sustainable jobs. OCCUPY THAT LEFTY!


Sat, Nov 19, 2011 : 11:54 p.m.

He didn't slash my taxes and I won't forget it when election time comes.


Fri, Nov 18, 2011 : 9:29 p.m.

AH, lets make sure we criticize the Governor. About as helpful as patting him the back for an up tick in economic activity. The Economists numbers are all over the map? Gee, I guess things change from month to month. Your Governor is a salseman for the State of Michgin. That helps bring in companies just like the previous Govornor. Obivousyly some of the companies are moving to Michigan willing to except some of our taxes. A lot has to do with a skilled work force. Good for Michigan.


Fri, Nov 18, 2011 : 7:42 p.m.

PatRay, I agree. I'm not sure how adding jobs at half of 2011's already-inadequate rate of 5,000+ per month can be considered "good" news. 2,500 new jobs per month for two years straight won't even cover the number of new people entering the workforce during the same time, much less the number of people who are out of work and looking. > "Now that Michigan's darkest days are in the books, much of today's news is positive," Fulton said. This isn't "positive news" as much as it is magical thinking.


Fri, Nov 18, 2011 : 6:57 p.m.

Only someone with tenure would call 60,000 new jobs over one hundred and four weeks good news. You might ask the 550,000 unemployed who max out unemployment payments at twenty weeks how they feel. They might have another viewpoint. But on the bright side, wages are down, corporate profits are up, taxes are down and CEO payments are at an all time high.

Monica R-W

Sat, Nov 19, 2011 : 12:39 p.m.

So true Pat Ray, so very true!


Fri, Nov 18, 2011 : 5:26 p.m.

Before giving credit or attributing blame, beware of "Post hoc ergo propter hoc."


Fri, Nov 18, 2011 : 3:44 p.m.

More U of M numbers that "prove" that we "need" a new train station. For the past couple of years these numbers seem manufactured to keep supplying figures, no matter how weak or unjustifiable, for the mayor to refer to when pushing the train station.


Fri, Nov 18, 2011 : 3:43 p.m.

So a lot of this is fueled by temporary workers. That stinks because you get no benefits and very little job security. The work is cool but people and the math would be better served with more stability.


Fri, Nov 18, 2011 : 3:35 p.m.

The growth in employment for 3 straight years represents excellent economic news. It reverses an 8-year decline during the 2002-2010 Granholm era. Michigan's lower corporate taxation and improved vehicle sales should lead to moderate economic growth. The one-state recession of 2002-2010 is now behind us. C1

Nathan Bomey

Fri, Nov 18, 2011 : 3:10 p.m.

A quick note worth mentioning. You may see other media reporting that U-M is projecting 77,000 new jobs in 2012 and 2013. That is the figure cited in the U-M press release. However, I have a copy of the economists' actual report — which shows that the 77,000 figure reflects the number of new jobs from the fourth quarter of 2011 to the fourth quarter of 2013. The number of jobs that will be added during the calendar year 2012 and 2013 is 68,700, according to the report. Just wanted to outline the discrepancy in case there's any confusion.


Fri, Nov 18, 2011 : 3:04 p.m.

No thanks to Rick Snyder! You'll note, these new jobs are not companies moving into Michigan because of great tax deals... they're simply companies recovering economically as a whole and responding to the national economic recovery by adding jobs. This is absolutely NOT a Snyder accomplishment (though I'm sure he will take credit).

Hot Sam

Sat, Nov 19, 2011 : 1 p.m.

What is really predictable is that a dense partisan fog prevents many from seeing the light...


Fri, Nov 18, 2011 : 4:30 p.m.

Sorry GoBlue. You can't tell the author of this article that. The economy has no place to go but up. The author will publish and republish it is instead Richard Dale Snyder credit. Why wait for his articles to be uploaded?


Fri, Nov 18, 2011 : 4:12 p.m.

Oh no Curious. Is betting against the guidelines set forth by the czar?


Fri, Nov 18, 2011 : 3:40 p.m.

I am willing to make a substantial wager that Michigan's payroll employment growth rate will significantly outpace the national expansion in 2011. The relatively strong growth in Michigan in 2011 reflects efforts to improve the business climate by lowering corporate taxation. In addition, higher levels of vehicle sales will clearly augment MIchigan's economic activity.


Fri, Nov 18, 2011 : 3:10 p.m.

I believe Snyder's thoughts behind restructuring the business tax was to allow existing businesses to grow and entice new businesses to the state. Maybe or maybe not his policies will have influenced a portion of the economic growth. However the future is looking better.


Fri, Nov 18, 2011 : 2:59 p.m.

And how much does this guy make? His predictions are all over the map! He just throws out new numbers every month.