Michigan’s economy was in the national spotlight last week.
During her response to President Donald Trump’s State of the Union, Governor Gretchen Whitmer made a point of saying that not everyone is feeling the growth that Trump announced during his speech.
So how good is Michigan’s economy? And who benefits?
“I think it’s inevitable that a recession will come sooner or later.” – Charles Ballard, Professor of Economics at MSU
As part of the weekly series MichMashMLive’s Cheyna Roth and WDET’s Jake Neher talk with Michigan State University economics professor Charley Ballard about what people think they know — and what they should know – about Michigan’s economy.
Click on the player above to hear MichMash’s full conversation on the state of the economy.
Michigan overall is doing “much better” than 2009, which Ballard called a “disastrous year.”
But the economy has slowed, and over the past three years job growth and gross domestic product growth have been particularly slow.
Ballard said that while people may feel content with an economy that is doing better than about a decade ago, there are areas of concern, especially with the potential for a recession in the future. ‘horizon.
“We in Michigan have grown less than the American average for the past three years and for most years of the past decade.”
Ballard said nationally things have improved over the past few months, so people have stopped talking about the possibility of a recession.
“Although I think it’s inevitable that a recession will come sooner or later,” Ballard said. “But Michigan’s economy has been kind of what I consider, not in a recession, but kind of on the verge of a recession.”
Over the past year, there has been almost no job growth, Ballard said. At times, Michigan experienced negative growth with fewer jobs than in January 2019.
It’s a similar situation with the gross domestic product (GDP) of the state; the dollar value of all goods and services produced in the state.
“We in Michigan have grown less than the American average for the past three years and for most years over the past decade,” Ballard said.
With a potential recession looming and given the ebb and flow nature of the economy, Ballard said one of the best things Michigan residents can do is “have a cushion.”
“If you have savings, it will help you through the tough times if and when the tough times come,” he said. “Of course, most Americans have very little savings. About half of American households live paycheck to paycheck.
Even if a person can’t save a lot, just having a small cushion can make a difference, Ballard said.
“The miracle of compound interest is that a dollar in 20 years is likely to be worth a lot more in retirement.”