Economic Indicators

Michigan Unemployment Rate Decreases in May, Matching the National Rate 

Michigan’s May 2023 monthly unemployment rate decreased to 3.7% . The national unemployment increased 0.3 percentage points to at 3.7% in May, matching Michigan’s unemployment rate. The Detroit MSA’s unemployment rate decreased at 3.2% in April 2023, the lowest rate since the start of 2020.

U.S. Economy Grew at 1.3% Rate in Q1 2023

Real gross domestic product (GDP) increased at an annual rate of 1.3 percent in the first quarter of 2023. In the fourth quarter, real GDP increased 2.6 percent. According to the Bureau of Economic Analysis (BEA), the increase in real GDP reflected increases in consumer spending, exports, federal government spending, state and local government spending, and nonresidential fixed investment that were partly offset by decreases in private inventory investment and residential fixed 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 900 to 2,021,300  in April 2023, after a decrease by over 500,000 in April 2020 – the lowest level since prior to 1990. Payroll jobs are still below 3,700 compared to pre-pandemic levels.

In Michigan, business applications increased to 12,787 in April 2023, decreasing 4.1% year over year and 24.8% from March 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.

Consumer Sentiment Reaches Highest Level in Four Months 

According to the University of Michigan Surveys of Consumers, consumer sentiment increased to 63.9 in the June  2023 survey, up from 59.2 in June 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. Consumer views over their personal finances are little changed from April, with stable income expectations supporting consumer spending for the time being.

According to Surveys of Consumers director, Joanne Hsu, Consumer sentiment lifted 8% in June, reaching its highest level in four months, reflecting greater optimism as inflation eased and policymakers resolved the debt ceiling crisis. The outlook over the economy surged 28% over the short run and 14% over the long run. Sentiment is now 28% above the historic low from a year ago and may be resuming its upward trajectory since then. As it stands, though, sentiment remains low by historical standards as income expectations softened. A majority of consumers still expect difficult times in the economy over the next year.  Read full report.

May PMI® contracted in May for the sixth time after 30 consecutive months of growth

The Manufacturing PMI® registered at 46.9% in May, 0.2 percentage points higher than the 47.1% reading in April, according to the Institute for Supply Management® (ISM®).

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.

Passenger traffic increases at DTW in April 2023 

Detroit Metropolitan Airport experienced a 4.6% increase in total passengers in the month of April 2023 compared to the same month last year. In April 2023, 2.55 million passengers utilized the airport compared to 2.44 million in April 2022. Cargo volumes decreased 21.9% year over year for the month of April 2023. Over 26.5 million pounds cargo were handled by the airport in April.

Michigan Vehicle Production Down from Year Ago 

Michigan vehicle production totaled 158,109 units in April 2023, decreasing -11.5%  from April 2022. Michigan accounted for 18.8% of the U.S. total production in April. In April 2023, auto production decreased 6.1 percent year-over-year in Michigan but was up 1.7 percent nationally; truck production decreased 11.8 percent in Michigan but was up 0.4 percent nationally.

In April 2023, U.S. auto production increased to 166,200 units—a 6.0% 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 May 2023, the seasonally adjusted annual rate (SAAR) decreased to 15.0 million light vehicle units, which was an 6.5% decrease compared to April 2023 but a 19.6%  up from May 2022, 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 very slightly, 0.2% to 1.40 million units sold in May 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.