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Report says Detroit could be insulated from possible national recession

Detroit Skyline
Lester Graham
/
Michigan Radio
Detroit skyline

A new report from the University of Michigan has found that Detroit could be insulated from a possible national recession.

The Detroit Economic Outlook for 2022-27 predicts Detroit will see employment levels well above pre-pandemic levels by 2027.

Gabriel Ehrlich is the director of Research Seminar in Quantitative Economics where he makes predictions about the U.S. and Michigan economies

He wrote the report.

"Historically when the national economy goes into a recession, Michigan and the Detroit area and the city of Detroit really get hit hard," he said. "We’re hoping this time might be a little bit different. One of the big reasons is the state of the auto industry."

He says there is still a backlog of vehicle orders due to chip shortages during the pandemic, so that will lead to a need for labor in car manufacturing.

The report finds that the average annual wage in the city has risen since 2014 from around $26,600 dollars to nearly $39,200.

The report predicted that the average wage for Detroit residents will be over $47,000 by 2027.

The city's jobless or unemployed rate has dropped below 2019 levels to a seasonally adjusted rate of 7.8% this past December, according to the report.

Though Ehrlich remained optimistic about Detroit's future, he noted that the improved rate was due to a drop in the labor force instead of a rise in number of employed residents.

He said the labor force drop is due to folks not looking for work for many reasons including choosing to retire.

Briana Rice is a reporter/producer operating out of Detroit.