Friday, May 18, 2012

Michigan Economy Shifts Into High Gear As America's Most Improved State Economy

The BLS released state unemployment rates today for April, and Michigan gets credit for the most improved state economy over the last year.  Michigan's jobless rate fell from 10.5% in April 2011 to 8.3% last month, and that 2.2% drop was the largest April 2011-April 2012 jobless rate decline in the country.

The chart above shows monthly jobless rates for Michigan and the U.S. back to 2000 and helps to illustrate how much the Michigan economy has improved in the last few years.  Michigan's April jobless rate of 8.3% is just 0.2% above the national rate of 8.1%, and that's the smallest Michigan-U.S. jobless rate gap since October 2000, more than a decade ago.  At the height of the recessionary effects on the labor market, the Michigan-U.S. gap was more than 4% in 2009 when Michigan's rate was above 14% compared to the 10% rate for the country.

Over the last year, the Michigan economy has added 59,300 new jobs, and about half (26,000) of those new jobs have been in manufacturing, reflecting a strong rebound in the automotive sector.  This dramatic improvement in the Michigan economy provides additional evidence that the manufacturing sector, especially the Midwest's heartland manufacturing, is at the forefront of the economic expansion.    

9 Comments:

At 5/18/2012 11:13 AM, Blogger morganovich said...

mark-

a question:

gdp is in expansion. it is now higher than pre recession.

manufacturing is still in recovery and 3% below pre recession peaks. (using INDPRO as a metric)

how can one describe a sector still in recovery as at the forefront of an expansion?

manufacturing has been lagging, not leading.

it just looks better in % terms because its drop was so much sharper.

 
At 5/18/2012 11:27 AM, Blogger Mark J. Perry said...

Measured by real GDP value-added, manufacturing output in 2012 is now above pre-recession 2007 levels.

 
At 5/18/2012 11:48 AM, Blogger morganovich said...

mark-

where are you getting that stat?

would like to look at the numbers.

 
At 5/18/2012 12:31 PM, Blogger Andrew Guenthner said...

I would also add that according to BLS data, the labor force in Michigan is growing once again, after a long period of decline, and the 1.5% employment growth over the past year is enough to put people back to work, albeit slowly, even in the absence of migration. A similar trend can be seen in neighboring states like Ohio as well. It is nice to see some real recovery for the region.

If you want to see another good employment story, look at the recent data for Oklahoma (labor force up a healthy 1.5% for the year, employmment up 2.4% and well above the pre-recession peak, unemployment rate 5.0%).

 
At 5/18/2012 12:59 PM, Blogger Larry G said...

would you have still got this outcome without the bailouts for the auto companies?

or is it other manufacturing besides autos that is driving the recovery?

 
At 5/18/2012 4:04 PM, Blogger juandos said...

"Measured by real GDP value-added, manufacturing output in 2012 is now above pre-recession 2007 levels"...

Now that is good news...

I'm curious though Scott Granni at Calafia Beach posting: What TIPS say about the future note the following on his site: 'Today, of course, things are just the opposite. Real yields are now negative, and that means the market has almost no hope for any meaningful economic growth for as far as the eye can see'...

My question (and probably a dumb one at that) do TIPS and manufacturing output affect each other in some way?

 
At 5/18/2012 5:28 PM, Blogger Henry H said...

Larry G, That's a good question.

I would think that GM's sales would have spread out among the manufacturers. The foreign manufacturers have most of their factories in right-to-works states in the south. The manufacturing would shift from the north to south. It would be the same story, but with right-to-work states replacing the headline.

 
At 5/18/2012 10:10 PM, Blogger Mkelley said...

Uh, actually GM and Ford sold more cars in April of last year than they did this April. Chrysler gained big-time this year over last, however. GM's share of the US car market has dropped almost 2% in the last year, while Ford lost 1.1 percent in that time:

http://online.wsj.com/mdc/public/page/2_3022-autosales.html#autosalesE

I know the media are hyping GM's fabulous "success" since the bailout, but I am still skeptical. Their market share continues it's decades-long slide, though all the government dough has kept it afloat for now. The real test will be the next downturn in car sales.

 
At 5/18/2012 10:39 PM, Blogger Henry H said...

Mkelley, Only 18-20% of the business is dependent on GM. The auto suppliers like GR Spring & Stamping have more than made up for GM's loss with Toyota's increase alone in April YTD 2012 vs April 2011 YTD.

 

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