Economic Indicators

Michigan’s February 2023 monthly unemployment rate increased to 4.3% . The national unemployment increased 0.2 percentage points to at 3.6% in February, placing Michigan’s unemployment 0.7 percentage points above the national rate. The Detroit MSA’s unemployment rate remained at 3.8% in February 2023.

Real gross domestic product (GDP) increased at an annual rate of 2.6 percent in the fourth quarter of 2022, after increasing 3.2 percent in the third quarter. According to the Bureau of Economic Analysis (BEA), the increase in the fourth quarter primarily reflected increases in inventory investment and consumer spending that were partly offset by a decrease in housing investment.. For more information, read the full BEA report.

The GDP is measured as the total market value of the goods and services produced within a specific geography during a given time period. Gross domestic product is a key indicator of the general health of the economy and its performance, with increases indicative of economic growth.

The Detroit MSA’s monthly payroll jobs  increased by 7,500 to 2,025,200  in February 2023, after a decrease by over 500,000 in April 2020 – the lowest level since prior to 1990. The previous largest monthly job cut since 1990 occurred in 2009, with a seasonally adjusted reduction of over 60,000 jobs. In the region, manufacturing increased to 248,600 employed individuals in February 2023.

In Michigan, business applications increased to 12,693 in February 2023, increasing 8.9% year over year and 2.6% from January 2023.

Michigan new business applications have totaled 136,801 in 2022, a 9.1% decrease compared to 2021 levels. While applications might have decreased year-over-year, they were well above pre-pandemic levels. Michigan business applications increased 44.9% compared to 2019 levels, more than 42,360 additional applications were filed in 2022 compared to 2019, indicating strong entrepreneurial activity. Michigan ranked 23rd in business applications per capita in 2022. New business application growth after a recession is a leading indicator of recovery, and often observed after times of economic hardship.

According to the University of Michigan Surveys of Consumers, consumer sentiment decreased to 62.0 in the March 2023 survey, down from 67.0 in February 2023. The Consumer Sentiment Index is a statistical measurement that provides an economic indicator of consumers opinion and optimism of the state of the economy.

According to Surveys of Consumers director, Joanne Hsu, consumer sentiment fell for the first time in four months, dropping about 8% below February but remaining 4% above a year ago. This month’s turmoil in the banking sector had limited impact on consumer sentiment, which was already exhibiting downward momentum prior to the collapse of Silicon Valley Bank. Overall, our data revealed multiple signs that consumers increasingly expect a recession ahead. While sentiment fell across all demographic groups, the declines were sharpest for lower-income, less-educated, and younger consumers, as well as consumers with the top tercile of stock holdings. All five index components declined this month, led by a notably sharp weakening in one-year business conditions. Read full report.

Manufacturing PMI® registered at 46.3% in March 2023. March PMI® contracted in March for the fifth time after 30 consecutive months of growth

The Manufacturing PMI® registered at 46.3% in March, 1.4 percentage points lower than the 47.7% reading in February, according to the Institute for Supply Management® (ISM®). According to the Institute, this month, the PMI^® registered its lowest reading since May 2020 (43.5 percent).

ISM® states a reading above 50% shows that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting. The index is based on a monthly survey of supply chain managers and measures general direction of economic trends in manufacturing and other sectors.

Despite significant increases throughout the two years, passenger traffic still trails behind 2019 with nearly 8.6 million less passengers in 2022.

Detroit Metropolitan Airport experienced a 18.8% increase in total passengers in the month of February 2023 compared to the same month last year. In February 20223, 2.11 million passengers utilized the airport compared to 1.77 million in February 2022. Cargo volumes decreased 5.8% year over year for the month of February 2023. Over 28.4 million pounds cargo were handled by the airport in February.

Michigan vehicle production totaled 164,267 units in January 2023, decreasing -1.9%  from January 2022. Michigan accounted for 20.6% of the U.S. total production in January. In January 2023, auto production rose 43.2 percent year-over-year in Michigan but was down 3.0 percent nationally; truck production decreased 4.9 percent in Michigan but was up 7.3 percent nationally.

In February 2023, U.S. auto production increased to 149,700 units—a 1.4% increase from the previous month. Production dramatically decreased to 1,700 in April 2020 due to pandemic restrictions. Followed by the global microchip shortage coming out of the pandemic drastically reduced production, leading to low inventories on dealer lots and lower sales volumes, shortages are not yet finished but production has begun to rebound.

SAAR Q1 2023 performed better than initial forecasts. 

In March 2023, the seasonally adjusted annual rate (SAAR) declined to 14.8 million light vehicle units, which was an 9.3% increase compared to March 2022 but down 1.2% from February 2023, according to the Bureau of Economic Analysis. According to Cox Automotive, the 15.3 million sales pace in Q1 2023 ended well ahead of the 14.1 million SAAR recorded in Q1 last year and was the best quarterly SAAR since Q2 2021.

Despite pressures on the economy and consumers, analysts expect U.S. sales to increase in 2023. According to the National Automobile Dealers Association (NADA), anticipates U.S. sales will rise to 14.6 million in 2023. Production will continue to struggle through supply shortages and consumers will continue to face high vehicle prices, higher interest rates, and low inventory levels.

Monthly U.S. vehicle sales volume increased 19.3% to 1.41 million units sold in March 2023.  According to  Cox Automotive, the vehicle market right now is healthy in comparison, but the market has also clearly shifted due to elevated prices, higher auto loan rates, and a focus on high-end buyers.