Income growth is slowing, and unemployment is growing, both signs that Michigan’s economy has been “hitting a rough patch recently.”

It’s obvious “the manufacturing industry is slowing down,” Gabriel Ehrlich, director of the University of Michigan’s Research Seminar in Quantitative Economics, recently told Bridge Michigan. “And just more broadly as a state, things have been slowing down.”

Despite the struggles, the RSQE revised upward its predictions for wage growth for the remainder of the year, boosting its September forecast by $2,500 to $64,000 in per capita income in its November update, WMUK reports.

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“In most cases, it’s not enough to transform somebody’s life,” Michigan State University economic professor emeritus Charles Ballard, told the news site. “It’s not going to mean that you’re going to be able to buy a Cadillac, so, it’s an incremental, it’s a small movement in the right direction.”

Ballard suspects the modest income growth projection will come at the expense of job growth. Michigan’s unemployment rate has increased for seven straight months, fueled in part by auto industry layoffs, to 4.7% in October.

“It’s a mixed bag,” Ballard said. “Good news – income numbers have been revised upward, so we’re a little bit more affluent than we thought we were. Not-so-good news – employment growth has slowed to essentially nothing.”

Michigan’s economic struggles are tied to the state’s reliance on the auto industry, manufacturing, and other sectors like construction that ebb and flow with interest rates, Ehrlich told Bridge.

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“Poor affordability due to high vehicle finance interest rates is one factor holding back vehicle sales, but we expect interest rates on auto loans to decline as the Fed’s cutting cycle proceeds,” according to the RSQE’s latest report.

Other forecasts suggest the state’s unemployment rate will fall back to 4.3% by the end of 2026, per capita income will rise to $68,500 by the same time, and inflation will continue to cool from a high of 8.2% in 2022 to 3.3% this year.

Despite those slightly positive trends, a 2024 Benchmarking Report from Business Leaders for Michigan “underscores that significant work remains to improve drivers of growth in population, household income, educational attainment and talent attraction for Michigan to be competitive with top states.”

“To reach Top 10 … we’ll need to focus on growth in population, high-wage job creation and education attainment,” the group’s CEO Jeff Donofrio said in a statement. “Top 10 states are magnets for jobs and people and make it easy for entrepreneurs to start and grow businesses. To move from the middle to the top, we need to accelerate efforts to attract and retain talent, improve education, foster the innovation economy and provide a competitive business climate.”

The benchmarking report aims to gauge the state’s progress toward the goal of becoming a top 10 state in terms of jobs, talent and a thriving economy.

Currently Michigan struggles in many metrics examined in the report, from the state’s rank of 38^th among states for poverty, and ranks of 36^th for gross domestic product per capita, 35^th for percent of population with a higher education degree, 35^th for median household income, and 33^rd for labor force participation.

The only metric in which Michigan ranks among the top 10 is population, though the state’s three-year growth rank is 43^rd nationally in that category.

“Creating a future where every Michigander has a clear path to prosperity requires bold leadership and unified effort. It’s up to all of us to ignite change and make Michigan a Top 10 state through the opportunities we create, the progress we achieve and the lives that will be transformed,” Donofrio said.

The report shows that if Michigan performed as a top 10 state, each household would see an annual increase in purchasing power of $6,400 – “enough to cover a year’s worth of groceries for the average family,” there would be 325,000 more residents with a degree or certificate, and about 239,000 fewer Michiganders would be living in poverty.

The latter, the report notes, is “enough residents to fill Ford Field nearly three-and-a-half times over.”

Despite Whitmer’s efforts “to expand economic opportunity and prosperity for all Michiganders,” the number of residents who cannot afford a “survival budget” that covers basics like shelter, food, transportation, and child care has exploded by nearly 200,000 since she took office in 2019.

Those folks, described as Asset Limited Income Constrained Employed, accounted for 41% of the state’s 4 million households in 2022, including more than half in 11 counties: Gogebic, Ontonagon, Houghton, Baraga, Alger, Luce, Oscoda, Iosco, Lake, Clare and Wayne.

In several cities, the percentage is nearly 80%, according to the United Way’s United for ALICE 2024 update.

In 2019, the statewide percentage of folks living paycheck to paycheck was 38%.

Those statistics and others documenting increasing bankruptcy filings, share of residents with accounts in distress, earned Michiganders the title of “the most financially distressed people in the country” by the personal finance website WalletHub this summer.