The COVID-19 pandemic continues to have an impact on the national, statewide and local economy. This will most certainly continue as new daily case numbers continue to rise. On Nov. 9, 2020 the State of Michigan reported 216,804 confirmed COVID cases, between Nov. 7 and Nov. 8 the Michigan Department of Health and Human Services estimated that was an average of 4,505 new COVID cases a day. Although Gov. Gretchen Whitmer does not have the executive powers she once did, the Michigan Department of Health and Human Services, and other agencies, have the ability to institute certain mandates. Currently, several—but certainly not all — businesses remain open, but scrutiny on safety precautions to slow the spread is increasing.
Current unemployment rates are discussed in this post to show one facet of the economic impact the pandemic has had on the economy. In future posts we will continue to dig into the other economic impacts of the virus, and also how local governments have fared with federal and state aide.
In September of 2020 the unemployment rates for the State of Michigan and for the City of Detroit declined from recent record highs as a result of COVID-19. However, unemployment rates remain higher now than at this time last year. The State of Michigan reported an unemployment rate of 8.2 in September, a lower rate than what was reported in August, which was 8.9. The State unemployment rate for September of 2019 was 3.5. In September of 2008, when the Great Recession was just getting underway, the unemployment rate was 8.4 percent.
For the City of Detroit, the unemployment rate for September of 2020 was 20.4, which is only slightly lower than the August rate of 20.9. In September of 2019 the unemployment rate was 8.1.
The data above shows a story that we are all familiar with now, the pandemic has had a direct affect on our economy locally and statewide. Another image the data highlights though is that the unemployment gap between the State and Detroit has grown wider since the pandemic hit. Federal Reserve Chairman Jerome Powell was recently quoted in the Detroit Free Press saying women, minorities and low-income workers are suffering the most in this downturn. Detroit is home to the largest black population in the state and also has among the highest percentage of residents who live at or below the poverty level.
The chart below displays the unemployment rates for each of the seven counties in Southeastern Michigan for September of 2019 and 2020. In September of 2020 Wayne County had the highest unemployment rate at 12.5. Washtenaw County had the lowest unemployment rate at 5. Each county though had a higher unemployment rate in September of this year compared to September of 2019. Just as Wayne County had the highest unemployment rate it also had the largest increase between 2019 and 2020; in that year it increased 7.1 points. Washtenaw County had the lowest increase at 1.7 points.
In addition to COVID impact employment rates, it has also impacted the housing stock and sale and rental rates. According to a recent Detroit Free Press article, housing prices continue to increase due a high demand but low stock of homes, low mortgage rates and also the fact that the early shutdown of the economy pushed the spring home selling season farther out into summer and now fall.
The chart below shows 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. While it does show an increase in average home prices, it has yet to reflect those of late summer and early fall.
According to the index, the average price of single-family dwellings sold in Metro Detroit was $132,460 in July of 2020; this was $131 higher than the average family dwelling price in June. The July 2020 price was an increase of $3,240 from July of 2019.