LANSING – With the national economy in a growth recession Michigan should expect to see job losses of 1.5 percent during 2009, a budget update memo released last week by the Senate Fiscal Agency said. The memo also said that while overall employment has dropped by 10.5 percent since the jobs peak in June 2000, the number of vehicle manufacturing jobs has fallen by 50 percent during the same time frame.

The memo also anticipates lower tax revenues in 2009, though that is largely in line with overall anticipated lower revenues that were forecast as part of finalizing the 2008-09 budget.

The memo said the U.S. economy has gone into a period of subpar growth. The overall U.S. economy grew by 2.2 percent in 2007 and currently is expected to grow by 1.1 percent in 2008 and 1.8 percent in 2009.

“However, the crisis in the financial sector is putting this forecast in doubt,” the memo said. While broad government action is needed to stabilize the financial markets, and help buck up consumer and business confidence, the national economy will still be hurt by weakness in housing markets as well as higher energy, food and commodity prices.

But if the national economy does grow, that will put it in a growth recession as opposed to a classic recession, the memo said. A classic recession is defined as a period when real growth declines for two consecutive quarters. In a growth recession, total GDP grows even while there are increases in unemployment and overall job losses.

The national situation will not help Michigan, the memo said. For 2008 total jobs are expected to decline by 1.8 percent in the state, the memo said.

The losses will continue into 2009, with an anticipated drop of 1.5 percent. That means 2009 would mark the ninth consecutive year of payroll declines in the state.

Since the state hit its peak in employment in June 2000, it has lost 494,900 jobs or 10.5 percent of the total. Since that peak, the state has lost 36.9 percent of its total manufacturing jobs.

The state has seen vehicle manufacturing employment fall by half in that time frame, from nearly 342,000 jobs in 2000 to an estimated 176,900 in 2008. The number is anticipated to fall even further, to no better than 160,700 in 2009.

Even with that precipitous decline, the state’s employment is overwhelmingly weighted in vehicle manufacturing. In 2007, the state had 26.5 percent of all vehicle manufacturing employment in the United States, though that was down from the 33.6 percent concentration in 2000.

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