Michigan’s unemployment continues to decrease, for the tenth straight month, and the labor force in the state continues to grow. This year is looking much rosier than in 2020 when great uncertainty riddled the state, and the country. With job recovery following the peak of the pandemic, and an increase in revenues from the sales and use tax and federal funding the state is predicting about a $5 million surplus. While such a surplus can viewed as a sign of improved economic times, we must also recognize inflation is on the rise, and uncertainty still looms with COVID and the war in Ukraine. Recognizing that inflation is hitting the homes of most, if not all, Gov. Gretchen Whitmer was proposed sending $500 to working Michigan families in attempt to help ease the strain on our pockets. The Republic led majority legislature is discussing a $2.5 billion plan that would cut taxes. What will happen remains unknown, especially as the project surplus is just an estimate.
But the data below does tell that story that Michigan’s economy is on the rise while the costs of goods and services is also on the rise.
Unemployment rates in Michigan and the City of Detroit remain lower than they were during the peak of the pandemic, and recent data shows a continued trend of them remaining fairly stable.
In March of 2022 the unemployment rate for the State of Michigan declined to 4.4 percent from the 5.3 percent it was reported at for February of 2022. In March of 2021 the unemployment rate was reported at 5.2 percent, which was only slightly higher than it was reported at a year later.
For the City of Detroit, the unemployment rate for March of 2022 was 10 percent, an decrease from the 12.2 percent it was reported at the month prior. When comparing it to the March of 2021 unemployment rate (9.3 percent) we see that the rate was slightly lower last year than this year.
The first chart below highlights how the CPI changed on a month-to-month basis between 2019 and 2022. Currently in 2021, the region’s prices were up 0.8 percent in April, with higher prices for:
•Public transportation and shelter (up 0.2 percent)
•New vehicles (up 1 percent)
•The increased price was partially offset by lower prices for used cars and trucks and apparel
•Overall, prices without considering food and energy prices, rose by 0.4 percent from the month prior.
The energy prices did not increase overall from the month prior due to a 1.3 percent decline in gasoline prices of 1.3 percent, but there was a 3.1 percent increase in the index for natural gas and a 0.5 percent increase for the energy index.
Overall food prices did increase between March and April though at 1.3 percent, with food prices at home increasing 1.5 percent and food away from home increasing at 1.1 percent.
When examining the second chart, which shows how prices changed on a year-to-year basis, we see how prices continue to increase in 2022, with the April year-to-year CPI being the among highest increase shown below. In fact, all of 2022 CPI changes have been the highest reported in several years.
In April of 2022 the CPI was reported to be 8.2 percent above what it was the year prior. Contributing factors to the continued increase in the CPI include
•Food prices increasing 11.2 percent over the last year
•Energy prices increasing 26.8 percent over the last year.
•New and used motor vehicles increasing 18.4 percent
•Shelter increasing 4.9 percent
•And household furnishings and operations increasing 10.8 percent.
