Unemployment Decreases throughout Southeastern Michigan

  • The unemployment rate decreased at the State and local level(monthly);
  • Regionally, Washtenaw County’s unemployment rate remains the lowest;
  • The average 30-year mortgage interest rate in Detroit is higher than the national average, lower than the week the federal interest rate was increased;
  • The Standard and Poor’s Case-Shiller Home Price Index for the Detroit Metropolitan Statistical Area shows home prices continue to increase monthly and annually.

According to the most recent data provided by the Michigan Department of Technology, Management and Budget, the unemployment rate for the State of Michigan decreased slightly to 5 percent in March of 2017 from 5.3 percent the previous month. The City of Detroit’s rate also decreased, but at a slightly larger rate. In March 2017, the City of Detroit’s unemployment rate was 10.3 percent, a substantial cut from February’s 12 percent. Additionally, unemployment in the City of Detroit decreased from to 11 percent in March of 2016 to 10.3 percent in 2017.

The chart above displays the unemployment rates for each of the seven counties in Southeastern Michigan for March of 2016 and 2017. St. Clair County had the highest unemployment rate for both 2016 and 2017 (7.1 and 6.2, respectively) while Washtenaw County had the lowest rates (3.1 and 2.8, respectively). St. Clair County and Wayne counties were the only two in the region with unemployment rates at or above 6 in March for both years. St. Clair County also had the largest unemployment rate decrease between March 2016 and 2017 at .9; Monroe County had the lowest at .1.

Four of the seven counties (Livingston, Monroe, Oakland and Washtenaw) all had unemployment rates at or below 5 for March of 2017.

Above are three average 30-year mortgage interest rates at the national, state and local levels for the week of May 15, 2017. These rates were provided by bankrate.com, which does a national survey of large lenders on a weekly basis. As a 30-year fixed rate mortgage is the most traditional type of home financing, this was chosen to show the rate differences. The State of Michigan had the lowest average interest rate for the week of May 15, 2017 at 3.82, which was lower than the last time we examined that data (week of May 20, 2017 the rate was 4.14 percent). Also during the week of May 15, 2017 Detroit’s average 30-year fixed mortgage interest rate was higher than the national average; this was not the case during the week of March 20, 2017. During the week of May 15, 2017 Detroit’s average 30-year fixed mortgage rate was 4.12 and the national average was 4.02.

Compared to two months ago, when the Federal Reserve Raised the federal interest rate by .25 percent, mortgage rates at the local (Detroit), state (Michigan) and national level are lower. While the rates are currently lower, the federal interest rate increase is expected to impact credit products, such as mortgages and auto loans, in addition to savings, home equity lines of credit and credit cards.

The above charts show the Standard and Poor’s Case-Shiller Home Price Index for the Detroit Metropolitan Statistical Area. The index includes the price for homes that have sold but does not include the price of new home construction, condos, or homes that have been remodeled.

According to the index, the average price of single-family dwellings sold in Metro Detroit was $111,790 in February 2017; this was $940 higher than the average family dwelling price in January. Also, the February 2017 price was an increase of $8,440 from February of 2016 and an increase of $14,720 from February of 2015 and an increase of $18,370 from February of 2014.

Detroit Unemployment Increases, Along with Number Employed and Labor Force

  • From April to May 2016, the unemployment rate across the state and within the city of Detroit increased (monthly);
  • Overall, however, the number of employed Detroit residents increased (monthly);
  • The Purchasing Manager’s Index for Southeastern Michigan decreased from May to June 2016 (monthly);
  • Commodity Price Index also decreased for Southeastern Michigan (monthly);
  • Standard and Poor’s Case-Shiller Home Price Index for the Detroit Metropolitan Statistical Area shows home prices continue to gradually increase on a month-to-month basis.

Unemployment

According to the most recent data provided by the Michigan Department of Technology, Management and Budget, the unemployment rate for the State of Michigan increased to 4.5 percent in May 2016; the unemployment rate was 4.3 percent in April. During this same period, unemployment in the City of Detroit also increased, but at a higher rate. Detroit’s unemployment increased from 9.1 percent in April to 9.8 percent in May.

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In May of 2016 the number of employed Detroit residents rose to 218,656, an increase of 1,577 from April. Between May of 2016 and May of 2015 there was a total increase of 8,756 employed Detroit residents, according to the Michigan Department of Technology, Management and Budget.

Along with the the number of employed Detroit residents increasing over the last year, so has the labor force. Between April and May of 2016 the labor force increased by 3,784 and between May of 2015 and May 2016 the labor force increased by 803. In May of 2016 the labor force recorded by the the Michigan Department of Technology, Management and Budget for the city of Detroit was 242,432.

Auto Manufacturing employment

The above chart shows the number of people employed in the auto manufacturing industry in the Detroit Metropolitan Statistical Area (MSA) (Detroit-Warren-Livonia) from May 2015 to May 2016. In that time frame the number of people employed in this industry decreased by 900, from 94,200 to 93,300.

PMI

The Purchasing Manger’s Index (PMI) is a composite index derived from five indicators of economic activity: new orders, production, employment, supplier deliveries, and inventories. A PMI above 50 indicates the economy is expanding.

According to the most recent data released on Southeast Michigan’s Manager’s Index, the PMI for June 2016 was 58.8, a decrease of 1.1 points from the prior month. The May 2016 PMI was a decrease of 3.2 from May of 2015.  Although there was a decrease, the PMI is still considered strong because of new orders, employment and production. There was a decrease in finished goods, which caused the decrease, along with a decrease in the commodity price index, which is shown below.

Commodity Price Index

The June 2016 Commodity Price Index decreased 7.1 points from May and 6.9 points from the prior year. According to the ISM-Southeastern Michigan PMI the Commodity Price decreased between May and June, however fuel, paper and plastics went up in price.

Detroit Home Prices

The above charts show the Standard and Poor’s Case-Shiller Home Price Index for the Detroit Metropolitan Statistical Area. The index includes the price for homes that have sold but does not include the price of new home construction, condos, or homes that have been remodeled.

According to the index, the average price of single-family dwellings sold in Metro Detroit was $103,780 in March 2016. This was an increase from $97,900 from March of 2015 and an increase from $93,780 from February of 2014.

Metro-Detroit’s Home Prices Continue to Grow

  • From November 2015 to December 2015, the unemployment rate across the state remained stable and the city of Detroit’s increased (monthly);
  • The Purchasing Manager’s Index for Southeast Michigan decreased from November 2015 to December 2015 (monthly);
  • Commodity Price Index increased from November 2015 to December 2015 for Southeast Michigan (monthly);
  • Standard and Poor’s Case-Shiller Home Price Index for the Detroit Metropolitan Statistical Area shows home prices are about $6,800 higher than in December of 2014.

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According to the most recent data provided by the Michigan Department of Technology, Management, and Budget, the unemployment rate for the State of Michigan remained constant at 4.5 percent between November and December of 2015. During this same period, unemployment in the City of Detroit increased from 10.6 percent in November to 10.9 percent in December.

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Since March of 2015 the number of people employed in the city of Detroit increased by 4,895, for a total of 214,282 people employed in the city in December of 2015. In the last year, the month of March had the lowest number of people employed in Detroit. Employment went down slightly in December.

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The above chart shows the number of people employed in the auto manufacturing industry in the Detroit Metropolitan Statistical Area (MSA) (Detroit-Warren-Livonia) from January 2015 to December 2015. In that time frame the number of people employed in this industry increased by 1,100, from 104,900 to 106,000.

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The Purchasing Manger’s Index (PMI) is a composite index derived from five indicators of economic activity: new orders, production, employment, supplier deliveries, and inventories. A PMI above 50 indicates the economy is expanding.

According to the most recent data released on Southeast Michigan’s Manager’s Index, the PMI for December 2015 was 54.8, an decrease of 2.3 point from the prior month. It was also a decrease of 9.4 from December of 2014.

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The Commodity Price Index, which is a weighted average of selected commodity prices, was recorded at 47.2 points in December 2015, which was 1.7 points higher than the previous month and 7 points lower than December 2014.

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The above charts show the Standard and Poor’s Case-Shiller Home Price Index for the Detroit Metropolitan Statistical Area. The index includes the price for homes that have sold but does not include the price of new home construction, condos, or homes that have been remodeled.

According to the index, the average price of single-family dwellings sold in Metro Detroit was $103,770 in December 2015. This was an increase of $6,800 from December of 2014. Note also that there were continuing increases at the end of 2015.

 

Various measures of labor utilization show improvement in Michigan’s, Metro-Detroit’s economy

  • From August 2015 to September 2015, the unemployment rate across the state increased and in the city of Detroit (monthly);
  • The Purchasing Manager’s Index for Southeast Michigan decreased from October 2015 to November 2015 (monthly);
  • Commodity Price Index increased from October 2015 to November 2015 for Southeast Michigan (monthly);
  • Standard and Poor’s Case-Shiller Home Price Index for the Detroit Metropolitan Statistical Area shows home prices are still slowly increasing.

Detroit Unemployment

According to the most recent data provided by the Michigan Department of Technology, Management, and Budget, the unemployment rate for the state of Michigan increased from 4.7 percent in September to 5 percent in October. Unemployment in the city of Detroit decreased from 12.7 percent in August to 11.5 percent in September.

Detroit unemployed, discouraged workers

 

Displayed above is an alternative measure of labor utilization in the state of Michigan at an annual basis. This measure of unemployment, which includes discouraged workers and marginally attached workers, shows that this too has been decreasing. This measure of labor utilization peaked in 2009 at 15 and by the third quarter of 2015 it decreased to 7.6. From 2009 to 2015 there has been a steady decrease.

Detroit's employed

 

From August to September, the number of people employed in the city of Detroit increased by 386, for a total of 214,192 people employed in the city in September. From March to September, the number of people employed in the city increased by 4,775. In the last year, the month of March had the lowest number of people employed in the city of Detroit.

Auto employment

The above chart shows the number of people employed in the auto manufacturing industry in the Detroit Metropolitan Statistical Area (MSA) (Detroit-Warren-Livonia) from August 2014 to August 2015. From August to September the number of people employed in this industry increased by 1,400, to a total of 106,700. This number is 11,300 more than the number of workers employed in the auto manufacturing industry in September of 2013.

Michigan PMI

The Purchasing Manger’s Index (PMI) is a composite index derived from five indicators of economic activity: new orders, production, employment, supplier deliveries, and inventories. A PMI above 50 indicates the economy is expanding.

According to the most recent data released on Southeast Michigan’s Purchasing Manager’s Index, the PMI for November 2015 was 57.1, a decrease of 1.3 of a point from the prior month. It was also an increase of .3 from November of 2014.

Michigan Commodity Price

The Commodity Price Index, which is a weighted average of selected commodity prices, was recorded at 45.5 points in November 2015, which was 1.7 points higher than the previous month and 16.3 points lower than November 2014.

Detroit Home Prices

The above charts show the Standard and Poor’s Case-Shiller Home Price Index for the Detroit Metropolitan Statistical Area. The index includes the price for homes that have sold but does not include the price of new home construction, condos, or homes that have been remodeled.

According to the index, the average price of single-family dwellings sold in Metro Detroit was $100,680 in September 2015. This was an increase of $5,610 from September of 2014 and an increase of $50 from August of 2015.