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Report forecasts Detroit overcoming pandemic challenges faster than the rest of the state

Detroit Skyline
Lester Graham
Michigan Radio
Detroit skyline

A new report from the University of Michigan predicts that Detroit will recover from the effects of the pandemic more quickly than the rest of the state.

The Detroit Economic Outlook forecasts the state of the economy through 2027.

The report was done by University of Michigan’s Research Seminar in Quantitative Economics department.

Detroit’s unemployment rate was a little over 10.6% in May, a steep decline from the high of nearly 40% during the pandemic.

Gabriel Ehrlich is an economic forecaster at University of Michigan. He lead the report.

He says that he doesn’t think the nation will enter a recession, but if it did, he thinks Detroit might fare well.

"There’s still a lot of demand from people who couldn’t buy cars earlier in the pandemic. There are still supply shortages limiting production and that’s encouraging for Detroit," he said.

The report expects job growth in Detroit to pass pre-COVID levels by the end of 2023.

"The city had a lot of momentum prior to COVID-19. And we are seeing a lot of the projects that were planned starting to come online now and get under construction and in some cases, open up. And so we do expect a lot of those projects to continue to drive growth in Detroit," he said.

The forecast suggests the city to add 11,300 payroll jobs this year and 6,100 in 2023.

"Job growth is forecast to continue but at a slower pace through 2027, and blue-collar industries should lead the way in the recovery during that time with work on such projects as the Gordie Howe International Bridge, Stellantis' Mack Assembly complex and General Motors' Factory Zero," a press release said.

Wage growth and inflation are expected to rise in-tandem, according to the report. Wages are expected to rise 6.6% this year but inflation is expected to rise at a rate of 7.7%.

Economists say they are "cautiously optimistic" that the country is not heading towards a recession.

Despite that, they are watching two scenarios that could potentially lead to one: Russia's war in Ukraine and the Federal Reserve's attempts to control inflation.

Briana Rice is Michigan Public's criminal justice reporter. She's focused on what Detroiters need to feel safe and whether they're getting it.
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