Lansing: Economist: Michigan to add 60,000 jobs a year

By Kathy Barks Hoffman

Associated Press

LANSING, Mich. (AP) -- Michigan's rebounding economy will add about 60,000 jobs annually for the next three years, a university economist predicted Monday.

George Fulton of the University of Michigan said job growth will be steady but not spectacular, dropping the state's annual unemployment rate to 10 percent this year and 9 percent in 2013. It was at 10.3 percent in March.

"Our view is that the Michigan economy is in the early stages of a sustained recovery," but not everyone will enjoy the resurgence, Fulton told state economists at the Capitol.

"For many residents, the struggle will continue," he said.

The rebounding domestic auto industry is helping the state get back on its feet as the Detroit Three have seen their first increase in market share since 1995, Fulton said. He expects all sectors except government to add jobs over the next three years, while teaching and government jobs continue to shrink.

Thomas Klier, senior economist for the Federal Reserve Bank of Chicago, said Michigan's economic fortune now is tied even more closely to the domestic automakers than it was in the past. But that's good news right now, since manufacturing is doing well in the current recovery, he said.

The Detroit Three now have 43 percent of their U.S. production capacity centered in Michigan after closing 14 North American assembly plants -- including one in Michigan -- between 2008 and 2010.

With control of a fifth of U.S. light vehicle production, Michigan still handily beats out second-ranked Ohio at 14 percent. Michigan likely will see its share jump to 28 percent in the coming year, Klier predicted, as Japanese automakers struggle to keep up production while dealing with the aftermath of the Japanese earthquake and tsunami.

All of that means more jobs for Michigan's still recovering economy. For the first time since Michigan jobs peaked in the spring of 2000, the state is expected to start adding more jobs than it loses, Fulton said. He anticipates 68,200 jobs added this year, 53,200 in 2012 and 61,400 in 2013, although he said final figures won't be out until the end of May.

Fulton noted the state still has a long way to go to make up for the more than 800,000 jobs lost during its one-state recession that started a decade ago. Another 10 years may have to pass before all those jobs are regained.

"It would take that long clearly, unless we have a big burst I'm not anticipating," he said.

He noted that jobs should climb again by the end of this year to the 4 million level reached just before the national economy tumbled in late 2008. And he expects to see real disposable income grow by 1.7 percent in Michigan this year despite are inflation rising to 2.9 percent.

Fulton's forecast does not take into account a broad tax proposal that will slash business taxes while requiring more from individual taxpayers. Gov. Rick Snyder could sign the measure into law as early as this week.

The Snyder administration, taking the new policy into account, predicts the jobless rate will drop to 9.2 percent in 2013, compared to Fulton's prediction of 9 percent.

Published: Wed, May 18, 2011


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