ANN ARBOR (WWJ) – According to new government data, the recession in Michigan ended last year.
University of Michigan Economist Donald Grimes says even though Michigan’s economy saw its best growth in eight years, consumers are still apprehensive.
“Consumer confidence is heavily influenced, of course, by the price of people’s biggest asset, which is their house. And also the fact that, for a lot of people, there is not this decline in the unemployment rate. The benefits are much more narrowly focused,” Grimes told WWJ Newsradio 950.
“The vast majority of people who were unemployed did not find a job. So, to them, it’s not getting better. Of course, housing prices are still going down, so the wealth, in some sense, is still deteriorating,” he said.
Grimes said, as in past recessions, the auto industry is leading the state out of the downturn. But, he said there’s an important difference this time.
“I think the one difference is when we came out of all of those other recessions you had so many auto jobs that you recovered all of the ones you lost. There is no hope that we’ll recover anywhere near all of the jobs we lost in the auto industry. We’ll recover a few of them,” said Grimes.
General Motors’ stock is trading almost 30 percent below its high set in January.
Grimes said it’s vital that other industries step up to the plate to keep the state’s economy headed in the right direction.