Michigan’s hard-hit labor markets caught a small break during July as the state’s unemployment rate dropped two-tenths of a percentage point to 15%, marking the first monthly rate decline since June 2008.
“The Michigan jobless rate stabilized a bit in July, as hiring occurred in hotels and the nursing and residential care industry,” said Rick Waclawek, director of the state Department of Energy, Labor & Economic Growth’s Bureau of Labor Market Information and Strategic Initiatives.
Some economists have held out hope that the government’s cash for clunkers auto incentives may boost employment in manufacturing in coming months.
Something already has boosted manufacturing numbers back to where they were in May; we went from 455.3, to 435.6 in June, back up to 453.8 (data rounded to the nearest hundred). I don't think that those numbers reflect the Cash for Clunkers program yet, but that will give us a further boost as the auto manufacturers are ramping up production to replace dwindling inventory on the hot models. Here's the word from GM yesterday:
General Motors Co said on Tuesday it is increasing production in North America for the second half of 2009 after a surge in sales ignited by the U.S. government's "Cash for Clunkers" incentives program.
The No. 1 U.S. carmaker said it would build 60,000 more vehicles than planned for the third and fourth quarters by increasing overtime and adding shifts at several North American assembly plants.
The move will bring about 1,350 hourly workers in the United States and Canada back to assembly lines, GM said.
With the actions, GM now plans to produce 535,000 vehicles in the third quarter, and build at least 20 percent more vehicles in the fourth quarter than the third.
Ford announced they are boosting production 26% for the fourth quarter, and Chrysler along with the Japanese automakers have indicated they will boost production as well. That means jobs in the all-important auto parts sector - and we lead the country in auto parts employment. Companies that were on the brink of shutting down for good might just make it through this after all, thanks to the Clunkers program. Say thank you to the nice President and the Congressional Democrats for that.
Erich Merkle, our go-to auto industry guy here in GR, seems to think that even when the Clunkers deal ends (and they are now predicting Labor Day on that), sales will remain strong.
“The recession is over,” said Erich Merkle, president of consulting firm Autoconomy in Grand Rapids, Michigan. “I think we’re going to get a bit of a drop-off as cash-for-clunkers runs its course, but I believe it will hand off to an economy that’s much stronger.”
Man, I hope he is right. Unfortunately we are still very dependent on the auto industry, and at this point its revival is key to our fortunes as we continue to work to diversify the state's economy.
Economists are still predicting that the national unemployment rate is going to continue to go up, and we do mirror trends in the national rate (sorry all you "one state" wonders out there, but that's the truth), so who knows if this is bottom for us yet. Probably not. But seeing that the steep slide has at least halted, with indications of better manufacturing numbers ahead, it makes me want to breathe a sigh of relief. If only for today.