State of Michigan
Compared to the December economic forecast for the state, not much has changed. The Bureau of Labor Statistics (BLS) revised last quarter estimates down, placing a cautionary note to future growth. This has brought our state employment projections down a bit from our December forecasts, but the rate of growth largely remains unchanged with year-over-year projections of around 1.2 percent growth. The private sector employment outlook, especially in manufacturing, is looking a bit rosier, while public sector employment has been adjusted down. On the “we didn’t see that coming” news, construction employment rose sharply in the first half of 2018, leading us to nudge up our year-end projections. Despite continued employment gains, we foresee labor market entrants to slightly outpace employment growth. Expect the unemployment rate to remain largely unchanged to slightly up, at 4.8 percent.
Wage growth remains tepid, and we do not see this changing in the foreseeable future. State-level personal income growth will likely be just north of inflation. Wage growth will be strongest in construction sectors. Other wage-growth sectors include mining and logging and utilities. Other sectors will largely reflect no real wage growth against inflation.
Updated July 2, 2018