Detroit’s Economy to See Growth in Incomes, Wages, and Employment
Posted By: DBUSINESS on February 9, 2026. For more information, please click here to read the source article.
Detroit’s unemployment rate, which has been on a gradual but steady rise since 2024, is expected to increase to an average of 10 percent this year, according to a new report.
Economists, however, forecast it will edge down one-10th of a percentage point next year and drop to 9.5 percent by 2030.
That’s the main message of the Detroit Economic Outlook for 2025-30 produced as part of the City of Detroit-University Economic Analysis Partnership between the University of Michigan in Ann Arbor, the city of Detroit, Michigan State University in East Lansing, and Wayne State University in Detroit.
The report notes the city’s average labor force count has reached its highest level since late 2010, while its unemployment rate has roughly remained in the single digits. That’s encouraging, the report says, because it’s occurred in a time of high interest rates and volatile international trade policies.
Another encouraging sign: The jobless rate gap between Detroit and the state has narrowed substantially over time, rising to 3.3 points in 2023 from 12.3 percentage points in 2010. The researchers expect it will widen to 4.5 percentage points this year, but narrow to 4.1 points by 2030.
Similar trends are seen in wages and income growth. The forecast calls for wage growth of Detroit residents to slightly outpace the statewide average, gradually narrowing the long-standing gap with wages city businesses pay.
By 2030, Detroit residents’ average wages are forecast to rise to 53.6 percent of the average wage earned at jobs in city establishments — the highest reading since the start of the researchers’ data in 2010.
Detroit’s prominent blue-collar industry group, which includes manufacturing, wholesale trade, construction, transportation, warehousing, and utilities, is recalibrating for growth.
The economists say the sector shed an estimated 1,300 jobs in the final quarter of 2025 as General Motors’ Factory Zero in Detroit reduced production and dropped to one shift, but they see the overall sector returning to growth by the end of this year.
There will be short-term pain as the auto industry in particular adjusts its current and future production away from electric vehicles and toward traditional internal combustion engines based on consumer demand.
Yet, by 2030, blue-collar industry employment is expected to be roughly 12 percent above its pre-pandemic level.
“While growth over the next five years is expected to be moderate, Detroit’s economy demonstrates notable resilience, as the current pause transitions to steady gains in employment, wages, and household income,” says Gabriel Ehrlich, director of the Research Seminar in Quantitative Economics, the U-M unit in the partnership.
Ehrlich’s co-authors are Jacob Burton, Don Grimes, Daniil Manaenkov, Michael McWilliams, and Yinuo Zhang.
To access the report, visit here.
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