Although metro Detroit’s housing market is improving — the value of single-family homes increased 16.1 percent over the past year — job growth continues to lag.
According to the Comerica Regional Economic Update, “current year-over-year job growth is much cooler than a year ago,” with July 2013 job numbers showing only 0.5 percent increase from the same period last year.
However, this comes hand-in-hand with a lower unemployment rate, which was 10.4 percent in the second quarter of 2012. A year later, the rate dropped to 9.4 — still higher than the national average of 7.6 percent at that time.
Robert A. Dye, senior vice president and chief economist at Comerica Bank, expects to see weak to moderate growth through next year. While his report notes that the “city’s financial woes will continue to be a drag on the regional economy,” he adds that the city’s bankruptcy, filed in July, offers “the breathing space it needs to plan for a sustainable economy.”
Dye says that it will take time for Detroit to get through the bankruptcy process and “clear the decks to experience more moderate growth. But that’s the whole purpose of bankruptcy proceedings,” he says. “The city’s financial woes will continue to be a drag on the regional economy as government services are cut back, creditors settle, and budgets are re-aligned.”