LANSING – Michigan could see a small overall decrease in jobs during 2006, before it starts to see employment gains beginning in 2007, the Research Seminar in Quantitative Economics at the University of Michigan is forecasting. But the state will see substantial personal income growth next year, the organization also forecasts.
Michigan will see job growth in the fourth quarter of 2005, the projection said, but for the year should see a net job loss of some 33,000 jobs. That would mark the fifth consecutive year the state had seen job losses.
Because of restructuring in the automotive industry, 2006 is likely to see total job losses for the year of about 3,200. Employment should stabilize by the second half of the year, the RSQE said.
By 2007, job growth should total about 17,400, the group said, a number it acknowledged would be “meager at best.”
In 2005, personal income should grow significantly over the 1.8 percent growth of 2004, to 3.4 percent, but real disposable income will actually decline because of the growth of inflation fueled by the sharp increase in energy costs.
But the RSQE expected that in 2006, personal income will grow by 4.9 percent, while inflation will fall slightly – from 2.8 percent in 2005 to 2.4 percent in 2006. That should mean overall income growth in the state of 2.5 percent.
That will lead to 5 percent income growth in 2007, RSQE reported, with inflation falling further to 2 percent, leaving a net income growth in 2007 of 2.8 percent.
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