Detroiters lost 10K jobs in 2024 but slow, steady rebound expected for next 5 years: forecast

Posted by author February 13, 2025 Jobs

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Detroit’s job market “went on a pretty wild ride” in 2024 in which more than 10,000 residents lost jobs and the total number of jobs in the city dipped below pre-pandemic levels, according to an independent economist forecast prepared for city officials.

But signs of a rebound emerged months ago and there is expected to be slow, steady growth for the next five years, according to the Detroit Economic Outlook for 2024-29. The independent report is produced as part of the City of Detroit-University Economic Analysis Partnership between the University of Michigan, Detroit, Michigan State University and Wayne State University. The five-year forecast helps shapes the city’s budget and fiscal planning.

“2024 was a rough year for resident employment in the city of Detroit,” said Gabriel Ehrlich, the report’s co-author and director of U-M’s Research Seminar in Quantitative Economics. Ehrlich spoke Monday at the city of Detroit’s biannual Revenue Estimating Conference held at the Coleman A. Young Municipal Center downtown.

“Resident employment declined by about 10,600 from December of 2023 to December of 2024 and obviously, that’s not great news,” said Ehrlich, referring to the number of Detroiters who had jobs, whether in the city or elsewhere. “I don’t want to mince words, but . . . it really reflects the broader softening in Michigan’s labor market, with a slowdown in the auto and finance industries in particular amid high interest rates.”

The report looked at the city’s job market in two ways — jobs located in Detroit and the number of Detroiters who have jobs regardless of location.

For jobs in the city, or payroll jobs, Detroit lost 7,500 jobs between August and November 2023 as the city grappled with strikes at Blue Cross Blue Shield of Michigan, the three major Detroit casinos, and the Detroit Three automakers.

Although payroll employment rebounded by 5,000 jobs in December 2023 as the strikes concluded, the losses resumed in early 2024, Ehrlich said. As of March 2024, the latest month data is available, the number of jobs in the city remained 5,100, or 2.2%, below its 2019 average.

Detroit residents have faced even greater challenges no matter where their jobs were located. After surpassing its pre-pandemic level in June 2023 and then holding fairly steady through the 2023 strikes, resident employment declined in 2024.

But signs of a rebound began to emerge in the final months of 2024, the report found. The loss of jobs was across the board, from white-collar to blue-collar and service industries, and the signs of rebound is also broad. The forecast expects various rates of growth in each sector.

“Detroit’s economy will return to growth this year as (federal) monetary policy eases and interest rates moderate,” according to the report. “By the end of 2025, we forecast resident employment to be 1% higher than at the end of 2024, although still below its peak in 2023.”

Jobs in the city are expected to grow at a slightly faster pace of 1.1%.

As the labor market strengthens, the city’s unemployment rate is forecast to drop from its recent highs to averaging 9.7% in 2025 and gradually declining to 8.1% in 2029. That’s still significantly higher than Michigan’s seasonally-adjusted unemployment rate in December, the latest data available, which was 5%, according to the state. The U.S. jobless was at 4.1% in December.

Wages also are expected to grow this year and in the next few years— narrowing a still-large disparity in wage levels between Detroiters and people who work in the city. The current average income of what Detroit residents earn from their jobs is about $45,000 annually, but the average annual income for a Detroit-based job is close to $85,000.

The data shows that most of the high-paying jobs in Detroit are not often held by people who live in Detroit. Meanwhile, people who live in Detroit have jobs outside the city that often pay less.

Wages for city residents are expected to grow by 3.8% per year through 2029, climbing to nearly $55,000 annually in 2029, outpacing both the 3.4% growth for jobs located in the city and the 3.0 % growth statewide. The average annual wage for Detroit payroll jobs is expected to climb to close to $100,000 in 2029. While the disparity in wage levels remains between Detroit residents and jobs in the city, the gap should narrow over the next five years.

The report also pointed out the vast changes in federal policies of President Donald Trump’s administration, from tariffs to wiping out of various federal funds funding, that could impact the economy in unpredictable ways.

“There is substantial uncertainty surrounding our forecast, particularly regarding policy changes with the new presidential administration as well as with the pace of inflation and the Federal Reserve’s response, ” reads the report.

“Trade policy is obviously much less predictable,” Ehrlich said, who added that potential tariffs can be short-term.

The report also points out that broad corporate and personal tax cuts are expected by the Trump administration.

laguilar@detroitnews.com