Washtenaw County Economic Outlook Report Shows Jobs Rebounding, Inflation Rising
This year Washtenaw County Economic Outlook Reportcompiled by economists at the University of Michigan (UM), finds that employment in the county is expected to return to pre-pandemic levels in the second quarter of next year.
“It will happen between April and June 2023 and it should continue to increase from there,” says economist Michael McWilliams, co-author of the report. “By the end of 2024, which is the last year we project in our outlook, we expect total employment to be about 3% higher than it was in 2019.”
The report was presented to the Washtenaw Economic Club (WEC) Seasonal kickoff March 24 at the Kensington Hotel in Ann Arbor. Hosted by Washtenaw Community College, which also sponsors the club, the event marked the WEC’s first in-person event since the COVID-19 pandemic. Each year, the WEC offers special events and a series of luncheon speakers on relevant topics.
McWilliams explains that the Economic Outlook Report is designed to provide an economic forecast for the county based on payroll employment growth, unemployment, and consumer inflation rates. It also forecasts employment trends in various industries. The report projects that the county’s unemployment rate will steadily decline, eventually falling back below 3%.
“It won’t be as close as it was before the pandemic, but it’s decreasing and that’s really good news for Washtenaw County,” McWilliams said.
He shares that before the pandemic, Washtenaw County was “really in a great place.” The economy had performed well for most of the decade, recovering slowly and steadily from the Great Recession. When the economy shut down in March 2020, Washtenaw County’s unemployment rate jumped from around 2.3% in February 2020 to over 15% in April. Employment fell by almost 40,000 jobs during this period. Currently, Washtenaw County has recovered about three of the five jobs lost during this period.
Noting that he and his co-authors broke down their employment and wage forecasts by different industry sectors, McWilliams says he was particularly intrigued by the forecasts for the blue-collar sector.
“The blue-collar industry lost maybe 20% of its jobs early on during the pandemic, but it recovered very quickly and in fact we expect it to end up in our forecast around 8% more than it was before,” he said.
McWilliams also has eyes on the accommodation and food services industry, which is powered by about 15,000 workers across the county. From 2019 to 2020, the sector lost 4,000 jobs on average annually. However, McWilliams and his co-authors believe that local bars, restaurants and hotels will experience the strongest growth of any other sector over the next three years.
Another major factor in the report is inflation, which is higher than McWilliams expected it to be a year or two ago. As a result, he thinks the Federal Reserve will raise rates at every meeting this year, sometimes more than a quarter point higher than usual. Therefore, it is likely that interest rates will rise in the short term. However, McWilliams says he hopes the government will be able to engineer some kind of “soft landing” to bring inflation under control without triggering a recession.
“There’s good news overall, and that’s that with each wave of the pandemic, there’s been less of an impact on the county,” McWilliams said. “So we have a lot to feel good about, and a lot of people are just starting to feel a sense of relief about the future.”
Jaishree Drepaul-Bruder is a freelance writer and editor currently based in Ann Arbor. She can be reached at [email protected].
Photo courtesy of Washtenaw Community College.