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UofM Economic Forecast shows Detroit’s employment recovery from COVID exceeding expectations

  •     Detroit’s recovery forecasted to lead Michigan


DETROIT, Michigan - The city’s recovery from the COVID pandemic is making great progress. “Detroit’s unemployment rate has declined more quickly than we dared to hope last year,” according to a new economic forecast released today by the University of Michigan and City of Detroit.  Today, the City, in partnership with the University of Michigan, released its Economic Outlook for Detroit through 2026, which looks at employment, unemployment and wage trends and projections.

According to the study, which looks at data through June of 2021:

  •     Unemployment among Detroiters has already recovered to approximately 3% below its pre-pandemic level.
  •     Detroit’s unemployment rate, which spiked to more than 38% in May of 2020 and averaged 22% for a year, has declined dramatically. By contrast, Detroit’s unemployment rate so far this year has averaged 9.9 percent and registered at 8.5 percent in June.
  •     Detroit’s unemployment rate is projected to average 9.5 percent this year and to decline gradually to 6.9 percent by 2026.

Detroit Recovery Forecasted to be Stronger than State

The forecast predicts a stronger recovery in Detroit than statewide. This pace of recovery is supported by several large development projects, such as Stellantis’ Mack Avenue plant expansion, the Gordie Howe International Bridge project, and a new Amazon distribution center under construction at the former Michigan State Fairgrounds.

Through the city’s Detroit at Work initiative, approximately 3,000 Detroiters already have been hired by Stellantis alone for its Mack Avenue plant and other nearby Stellantis facilities, according to Nicole Sherard-Freeman, Mayor Duggan’s Group Executive for Jobs, the Economy and Detroit at Work.

“The Mayor has a clear strategy, which is to attract major employers that will put Detroiters to work and this study reflects some of our initial success in those efforts,” said Sherard-Freeman.  “As the study suggests, we expect our numbers to get even stronger as Amazon and other projects come online and begin hiring more Detroiters.”

The forecast is optimistic about Detroit’s blue‐collar industries. The study forecasts that employment in these industries to grow to nearly 25 percent higher than their pre‐pandemic level by 2026.

This Economic Forecast comes a year after the UofM released encouraging news regarding the state of poverty in Detroit.

  •     Between 2012 and 2019, Detroit’s poverty rate plummeted from 42.3% to 30.6%.  This equates to 77,000 fewer Detroiters in poverty in 2019.
  •     Detroit’s nearly 12 percentage point decline in poverty was larger than that of most large industrial cities in the Midwest and Northeast. For comparison, Cleveland and Philadelphia saw declines of 5.3 and 3.6 percentage points, respectively.
  •     Detroit’s poverty rate in 2019 was the city’s lowest in more than a decade and below what it was in 2007, before the last major economic downturn.

Detroit’s economy is not without its challenges. The study shows we still need to increase the ability of Detroiters who are working to earn enough to support their families. This is something the city addresses through the Detroit at Work program.

"Having this annual Detroit-specific forecast is tremendously helpful in measuring the city's progress as we work to provide Detroit residents with greater economic opportunity,” said City of Detroit Chief Financial Officer, Jay Rising. “We appreciate our partnership with the University of Michigan, as well as the other institutions that contributed to the study.  This report clearly shows that Detroit is on the right path with the strategies we are implementing."

The economic forecast was produced by economists at the University of Michigan's Research Seminar in Quantitative Economics, who work in partnership with the City of Detroit and economists at Michigan State and Wayne State universities.

The full report can be found here: Detroit Forecast (2021.08).pdf (detroitmi.gov)


For Immediate Release: August 23rd, 2021
Media Contact: Corey McIsaac
248.870.8620 / [email protected]