This year's Washtenaw County Economic Outlook report
, compiled by University of Michigan (U-M) economists, finds that employment in the county should recover to pre-pandemic levels in the second quarter of next year.
"It will happen sometime between April and June of 2023 and it should keep rising from there," says U-M economist Michael McWilliams, a co-author of the report. "By the end of 2024, which is the last year that we forecast in our outlook, we think that total employment will be about 3% higher than it was in 2019."
The report was presented at the Washtenaw Economic Club's (WEC)
seasonal kickoff on March 24 at the Kensington Hotel in Ann Arbor. Hosted by Washtenaw Community College
, which also sponsors the club, the event marked WEC's first in-person event since the COVID-19 pandemic. Every year WEC offers special events and a luncheon speaker series 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 changes across various industries. The report anticipates that the county's unemployment rate will continually decrease, eventually falling back under 3%.
"It's not going to be as close as it was prior to the pandemic, but it's declining and that's really good news for Washtenaw County," McWilliams says.
He shares that prior to the pandemic, Washtenaw County was "really in a great place." The economy had been doing well for the better part of the decade, slowly and steadily recovering from the Great Recession. When the economy shut down in March 2020, Washtenaw County's unemployment rate shot up from about 2.3% in February 2020 to over 15% in April. Employment fell by almost 40,000 jobs during that time. Currently, Washtenaw County has recovered about three of five jobs lost during that period.
Noting that he and his co-authors divided their forecasts of employment and wages by different industry sectors, McWilliams says he was particularly intrigued by the forecast for the blue-collar sector.
"The blue-collar industry lost maybe 20% of its employment initially during the pandemic, but it recovered really quickly and actually we expect it to finish in our forecast about 8% higher than it was before," he says.
McWilliams also has eyes on the accommodations and food services industry, which is powered by about 15,000 workers across the county. From 2019 to 2020, the sector lost a substantial 4,000 jobs on an annual average. However, McWilliams and his co-authors believe local bars, restaurants, and hotels will experience the strongest growth compared to all other sectors 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 by over a quarter point more than usual. Therefore, it's likely interest rates will rise in the short-term. However, McWilliams says he hopes the government will be able to engineer some sort of "soft landing" to bring inflation back under control without causing a recession.
"There is good news overall, and it's that with every wave of the pandemic, there's been less of an impact on the county," McWilliams says. "So we have a lot to feel good about, and a lot of people are starting to feel just 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@example.com.
Photo courtesy of Washtenaw Community College.