Aug 30, 2022 - News

Economic indicators point to growth in Detroit — with caveats

Downtown Detroit is shown from the air.
Downtown Detroit. Photo: Samuel Robinson/Axios

Detroit's economy should continue recovering even as the risk of a potential national recession looms, local economists predict.

Driving the news: The University of Michigan and partners released a new 2021-27 economic outlook report for the city last week.

What they're saying: "We are projecting local growth to continue despite a slowing national economy in part because of pent-up demand in the auto industry," Gabriel Ehrlich, an author of the forecast, said in a news release.

  • Russia's war in Ukraine worsening or increased Federal Reserve action to control inflation could trigger a U.S. recession. The report authors write that while the risk of one has "risen sharply," they're still "cautiously optimistic" that it won't happen.

Yes, but: While the city's resident employment rate is largely on the rise after extreme lows in 2020, the economists saw a "concerning but likely temporary" dip of 1.4% between March and May.

  • Plus, 7.7% inflation is expected to outpace 6.6% wage growth for all jobs located in the city this year. So while people will make more money, the increased costs they are paying at the pump and elsewhere will keep their income down.
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