Monday, February 10, 2020

Detroit to outperform Michigan in job growth, study says

Posted By on Mon, Feb 10, 2020 at 11:57 AM

click to enlarge Downtown Detroit. - STEVE NEAVILNG
  • Steve Neavilng
  • Downtown Detroit.

Detroit’s recovery will continue with relatively strong gains in household income, employment, and labor force participation through 2024, according to a report by the city and the University of Michigan.

The city has come a long way since it filed for bankruptcy in July 2013. At the time, the unemployment rate was 18.7%. The rate dropped to 8.6% in 2019 and is expected to reach 7.9% in 2023 and 2024.

The report predicts that the city’s unemployment rate will drop faster than Michigan’s, which is expected to reach 3.7% in 2024.

Between 2018 and 2019, the city’s labor force grew from 247,500 to 251,900, or 1.8%.

“Bringing new jobs to Detroit and filling them with Detroiters has been a cornerstone of the Mayor’s economic development strategy,” David Massaron, chief financial officer for the city, said in a news release. “This independent forecast validates that strategy as we work to ensure Detroiters have opportunities for good jobs.”

The sectors with the strongest potential are service, financial, leisure, hospitality, education, health care, transportation, warehousing, and utilities, according to the study.

Household income is expected to grow between 4% and 4.7% per year between 2020 and 2024.

“Since its bankruptcy, Detroit has vastly improved its financial position, running budget surpluses and doubling its rainy day fund,” the study states.

Despite the good news, “Detroit's economy continues to face well-known challenges, including an elevated poverty rate and relatively low educational attainment among its residents,” University of Michigan economist Daniil Manaenkov said in a news release.

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