Michigan Economic Update – 2014:Q3

By Paul Traub

Michigan’s contribution to the economic wellbeing of the Seventh District increased in July to 0.11, its highest level since March 2013, according to the Federal Reserve Bank of Chicago’s Midwest Economic Index. However, positive contributions from services, manufacturing, and the consumer continue to be offset by slow growth in the construction sector. A reading above zero indicates that Michigan’s economy is expanding above its historical trend. The index is a weighted average of economic indicators from four broad sectors of the economy; manufacturing, construction and mining, services, and consumer spending.

Real per capita income in Michigan registered continued improvement in Q1:2014, up 1.4% on a year-over-year basis versus 1.6% for the nation as a whole. Since hitting its recessionary bottom in Q1:2010, Michigan’s real per capita income has increased by a total of 8.9% compared with 5.3% for the nation over the same period.

Other key indicators include:
• Michigan’s unemployment rate declined to 7.4% in August versus 6.1% for the nation.
• Michigan home prices increased 7.7% in Q2:2014 on a year-over-year basis and have finally surpassed their calendar year 2000 level.
• U.S. light vehicle sales recovered to their highest level since January 2006 on a seasonally adjusted annual rate basis.
• Michigan light vehicle production fell 3.5% August year-to-date compared with the same period last year, as Michigan’s share of total North American production dropped to 13.9% versus 15.2% in 2013.

For a more detailed look into the numbers behind Michigan’s economic performance, follow the link to Chicago Fed’s Michigan Economic Update – 2014 Q3.