LANSING ? Gov. Jennifer Granholm at the close of 2004 predicted that Michigan would see job growth in 2005 after three consecutive years of declines, but her administration forecasted Wednesday that the state would instead lose more jobs than it gains.

The forecast came on the same day that the state announced unemployment in July rose to 7 percent from June’s 6.8 percent rate.

At a December news conference, Granholm said of Michigan’s economy: “2005, I think, is going to be a good year for us. It is going to be a year of job growth, not straight up, but job growth, solid job growth on a subtle trajectory.”

But the economic forecast submitted Wednesday by Granholm’s Department of Treasury projected a 0.3 percent decrease for 2005 in wage and salary employment. It also predicted the annual unemployment rate for 2005 would be 7.2 percent, an increase from 7.1 percent in 2004, and 7.5 percent for 2006.

Granholm press secretary Liz Boyd said Michigan faces difficult economic conditions.

“The hard reality is our Michigan economy continues to be plagued by a downturn in the manufacturing sector,” she said.

Granholm’s proposals to invest money into diversifying the economy and to improve the business tax structure would help boost the state’s economic climate, Boyd said.

Treasurer Jay Rising said the higher unemployment rate projected for 2006 reflects, in part, more workers attempting to join the labor force. But Republicans seized on the administration’s own forecast as damning evidence against Granholm’s policies.

“This governor said that 2003 and then 2004 and then 2005 would be the year of jobs. So far all we’ve seen is continued, steady, massive job losses,” said Nate Bailey, Republican Party spokesperson. “This is not the progress that Michigan’s families need. Now she comes out and says the worst is yet to come? Unemployment will continue to rise? Job losses will continue?”

Republicans also delighted in a graphic included by the administration in its economic forecast showing how much better the state’s job picture improved after the 1990-91 recession (when Republican former Governor John Engler was in office) compared to the 2001 recession.

Engler also was in office in 2002 for the first year after the 2001 recession.

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