U-M Economist: 'Michigan's Economy is Doing Great'

The state of Michigan experienced the nation’s fourth highest job growth in January, according to the most recent U.S. Bureau of Labor Statistics data.

The net employment increase for one month in Michigan was 18,800 jobs from December 2015 to January 2016. Florida experienced the largest gain during this period (32,200 jobs). In the 12 months from January 2015 to January 2016, Michigan added a net 87,300 jobs, 10th-best in the country. California added 444,900 jobs to top the list. California’s population is also nearly four times Michigan’s 10 million.

Michigan’s unemployment rate of 4.9 percent in January is the lowest since June 2001, when it fell to 4.4 percent. The jobless rate here eventually grew as high as 14.9 percent in June 2009.

“Michigan’s economy is doing great, although it will be more challenging as auto sales peak,” said Don Grimes, an economist with the University of Michigan, in an email. “Then we will really know if it’s just an auto driven rebound or if Michigan's economy has fundamentally improved. If as auto sales peak, employment growth is simply close to the U.S. average (less than the U.S. growth rate by 0.5 percent or less) than Michigan will have become a more structurally sound state.”

Michigan saw its strongest one-month gains from December to January in the manufacturing sector which added 5,200 jobs. The leisure and hospitality industry, which includes hotels and restaurants, added 4,700 jobs.

The state's workforce of 4.8 million is the highest it has been since May 2010.

“Michigan is in its fifth year of recovery,” said James Hohman, the assistant director of fiscal policy for the Mackinac Center for Public Policy. “The unemployment rate decline had been caused by both employment gains and a decreasing labor force. But even this is changing with over 100,000 people being added to the labor force since 2012.”