Michigan Recent Economic Indicators

by Administrator 24. May 2010 09:12

I posted on Recent Detroit Economic Indicators on May 17th.  One of the focal points of the piece was Detroit’s unemployment rate.  Despite the fact that the unemployment rate has been dropping in Detroit this year, I demonstrated that is was really a factor of the time of year rather than a true drop by taking into account the 20 year monthly-adjusted average.  This was a ratio of unemployment by month to the 20 year average unemployment by month.

Recently, Crain’s Detroit Business article indicated that Michigan’s jobless rate dipped last month. While Michigan can certainly use the good news, I decided that converting the unemployment rate to a ratio of unemployment by month relative to the 24 year average of unemployment by month would again give a more accurate indication of the real diamond rings trends.  

What I found is that the unemployment situation really has not been improving since the start of the year, even leaving aside for the moment underemployment and those deciding to exit the labor force.  This table represents the ratios of unemployment for the last sixteen months:

Table 1: Ratio of Unemployment by Month to 34 Year Average of that Month for Michigan 

Jan2009 Feb2009 Mar2009 Apr2009 May2009 Jun2009 Jul2009 Aug2009    
1.37 1.45 1.50 1.55 1.73 1.74 1.71 1.78    
 Sep2009 Oct2009 Nov2009 Dec2009 Jan2010 Feb2010 Mar2010 Apr2010


1.83 1.86 1.80 1.83 1.64 1.64 1.68 1.70


















 

For a comparative perspective the high (November 1982) and low (April 2000) for the last 24 years were:

Nov1982

Apr2000
2.17 .385
 

An even better way to look at these figures is to take the ratios and standardize them so that they can be compared across months. The ratios were subtracted by one and then divided by the standard deviation. This is akin to seasonally adjusting; however, a monthly-adjusted figure gives an even more refined picture of the relative unemployment situation. 

Table 2: Standardized Unemployment Average by Month for Michigan 

Jan2009

Feb2009 Mar2009 Apr2009 May2009 Jun2009 Jul2009 Aug2009


.97 1.20 1.33 1.47 1.94 1.98 1.88 2.06


 Sep2009 Oct2009 Nov2009 Dec2009 Jan2010 Feb2010 Mar2010 Apr2010
2.21 2.29 2.12 2.21 1.70 1.71 1.81 1.87












 

The figure below shows the monthly-adjusted unemployment rate for Michigan standardized across months (Z-score). November 1982 marked the high point at 3.1 standard deviations above normal, while April 2000 marked the low point at 1.6 standard deviations below normal.  Last month, we were 1.87 standard deviations above the 34 year average. 

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About the Authors

We are the Center for Urban Studies Economic Development Unit.  We have several authors who contribute directly and indirectly to this blog.

Lyke Thompson, Ph.D.

Director of the Center for Urban Studies and Professor in Wayne State University's Political Science Department, has specialized his research on the urban political and economic environment.  A primary focus has been centered on municipal economic development, urban policy, and the determinants of economic growth.

Eric Stokan, MA.

Research assistant at the Center for Urban Studies Economic Development Unit.  Mr. Stokan serves as the lead researcher of the Unit, analyzing economic data using various statistical techniques.  Mr. Stokan is interested in questions concerning municipal economic growth and industry mix as well as determinants of local economic incentive adoption.

Mary Hennessey

Research technician at the Center for Urban Studies Economic Development Unit.  Ms. Hennessey researches the effectiveness of local economic development incentives.  Specifically, she has conducted a thorough investigation of brownfields and is currently working on public transit.