According to economists at the University of Michigan, Oakland County’s economy is expected to return to normal this year and have a „solidly positive outlook” for the next few years.
Oakland, one of the state’s most populous counties, is expected to see job gains over the next three years, with its payroll employment returning to pre-pandemic levels in the second quarter of 2025 and rising 1.2% by the end of that year.
In the annual forecast of the Oakland County economy, The UM Research Seminar in Quantitative Economics It predicts that the number of jobs will increase by 1.4% this year, 1.3% in 2024 and 1.6% in 2025. The local labor force is expected to grow faster than the number of employed residents, putting upward pressure on the unemployment rate this fall and the first half of 2024.
A positive outlook from economists forecast They will follow what they describe as an economic „mixed bag” for 2022. The county’s job growth in the third quarter of last year lagged behind Michigan as a whole, with Oakland recovering 82% of the jobs it lost at the start of the pandemic. The state is recovering 90%. They are concerned that the number of residents in the district has dropped by nearly 8,000 in the 12-month period ending February 2023.
Economists say the latest data is „puzzling” and could be the result of „commuting, an increase in multiple job holders by residents or a decline in self-employment”.
„Despite the challenges of the past year, we are optimistic that Oakland County’s economy will return to normal in 2023, with broad-based job growth across industries, even as the national economy slows,” he said. Gabriel EhrlichDirector of RSQE.
Overall, Oakland County has lower incomes and higher incomes than Michigan. Statewide, 20% of residents live in low-income households, which is 30% of the state. Share of county residents living in high incomes
Households (28%) are much higher than the state (17%).
Economists, however, say the boom has not been steady. As of 2021, the area of Pontiac and Waterford Township had a median household income that was less than half the median household size of the area that includes Birmingham, Bloomfield Hills and Bloomfield Township.
They also note stark disparities in income by race and ethnicity: 18% of Hispanic and non-white residents in counties classified as low-income in 2021 and 31% lived in high-income households. Those proportions were nearly reversed for black and Hispanic residents.
An encouraging sign in the forecast is that wages in the county’s lowest-paying industries are expected to grow faster than those in higher-paying industries over the next three years. That, they say, should go some way toward reducing wage inequality.
The county’s unemployment rate is expected to average 2.7% in the first part of the year, rising to 3% by the end of the year. Economists forecast the local job market to slow and rise modestly as the country enters a mild recession in the first half of next year.
The county’s unemployment rate is projected to drop from 3.4% in mid-2024 to 2.8% by the end of 2025, with the state unemployment rate expected to be 3.9% by the end of that period. If forecasted, the county’s rate would be half a percentage point above its average before the pandemic.
Economists say the return to pre-pandemic labor force levels reflects the strength of the county’s economy, although they warn that labor shortages will be „a fact of life in Southeast Michigan for the foreseeable future.”
„Oakland County’s strong overall performance on these measures means we believe it is well-positioned for the future, despite the current challenges facing the local and national economies,” the economists said in the report. „The combination of an educated population, a high share of managerial and professional jobs, and an attractive standard of living should provide a solid foundation for economic prosperity during our forecast period and in the years to come.”
The 38th annual UM Forecast of Oakland County’s economy is conducted by the county’s Department of Economic Development.
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