ANN ARBOR – Michigan could lose 310,700 jobs during 2009, the latest forecast from the University of Michigan-based Research Seminar in Quantitative Economics said, the worst year for job losses in the state since the 1950s.

And the latest forecast for job losses is 2.5 times the number of jobs the organization predicted back in November.

However, the organization is still held to forecasts that 2010 should be a better year economically. Better, but still not good, the forecast suggests. During the first part of the year job losses could average 2.7 percent but improve to zero by the year’s end, leading to the chance of job growth in 2011.

The long economic slide the state has endured since mid-2000 was hit by the intensifying national recession and the collapse of the auto industry – which led to the bankruptcy filings of General Motors and Chrysler – and meant annual job losses of 11.7 percent during the first quarter of the year, the RSQE forecast said.

That should improve to a job loss rate of 5.2 percent by the end of the year, the RSQE said, which should result in total job losses of 310,700 jobs in 2009.

Back in November, when the RSQE did its annual forecast however, before the full extent of the U.S. economic and automotive industry collapse was evident, the group had forecast the state would lose 124,000 jobs.

For the 10-year span since the state went into a recession in mid-2000 the state RSQE estimated Michigan could see total job losses of 950,000 jobs which would likely exceed the number of jobs the state gained during the boom years of the 1990s.

The RSQE said the increasing unemployment picture would mean the state could hit a jobless rate of 15.8 percent in 2010 (the current jobless rate is 14.1 percent). That would top the 15.6 percent rate the state average in 1982. In 2008, unemployment averaged 8.4 percent.

The non-manufacturing sector of the state’s economy, which accounts for 71 percent of the economy overall, will record more than half the job losses during the year, the forecast said. Manufacturing, which now accounts for 14 percent of the state’s economy, should account for 42 percent of the job losses.

During 2009, personal income should fall by .5 percent which is the result of the weak jobs market as well as declining income by business owners.

But local inflation should be nonexistent in 2009, and in fact prices should fall by .7 percent, the first overall decline in prices in 60 years, the RSQE said. The decline is fueled mainly by the drop in oil prices since a year ago.

The inflationary factor, tied with a drop in federal personal tax rates, should mean, however, that real disposable income in the state grows during the year, the RSQE said, which means over the year individual purchasing power should not change.

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