Michigan economy continues slow climb

By Kathy Barks Hoffman Associated Press LANSING (AP) -- The Michigan economy continues to slowly improve, thanks largely to better auto sales and increased production at the state's many auto plants, an economist said Monday. Comerica Bank released its September economic activity index Monday. It showed that economic activity rose one point over the month before. The index level is now 24 percent above the low it hit during the recession and slightly better than its year-ago level. "U.S. auto sales increased to a 13.6 million unit rate in November and this is good news for the state," chief economist Robert Dye said in a release. "The climb out of the depths of the recession still looks very uneven, though, as hard-hit areas within Michigan are stuck with very high unemployment rates." A separate survey released Monday by Michigan State University indicates state residents are not particularly optimistic about their economic future. Just 38 percent of state residents in a Sept. 15 through Nov. 8 survey said they expect to be better off a year from now, while 36 percent expected to be worse off and 26 percent expected to be about the same. That's a far different response than the one the university got in its Feb. 12 to March 29 survey, when 60 percent of residents said they expected to be better off in a year, 23 percent expected to be worse off and 17 percent expected to be about the same. Those ratings were the highest recorded by the Institute for Public Policy and Social Research survey since 2004, but some residents' optimism apparently bled away as the economic doldrums dragged on. Even though the economy "in so many ways is better than it was a year ago ... the progress seemed to grind to a halt at the midpoint of 2011," said economics professor Charles Ballard, who directs the State of the State survey. Michigan's seasonally adjusted unemployment rate was 11.1 percent in September, down slightly from the month before. The rate improved significantly in October, which wasn't accounted for in Comerica's September economic activity index or reported before the Michigan State survey was completed. Michigan saw its jobless rate drop to 10.6 percent in October, tying it for third-highest nationally with Mississippi. Seasonally unadjusted jobless rates dropped in all of Michigan's 17 major labor market areas that month, but much of the drop came from fewer residents looking for work, state officials said. Dye said Michigan's housing market continues to be a drag on economic growth "and will likely be soft through 2012." Home prices in Detroit have reached their lowest points since the housing bust more than four years ago, The Standard & Poor's/Case-Shiller index showed last week. The Michigan Economic Activity Index weighs nine indicators of economic activity in the construction, manufacturing and service sectors as well as job growth and consumer outlays. The Michigan State survey was based on interviews with 807 state residents from Sept. 15 through Nov. 8. It had a margin of sampling error of plus or minus 3.5 percentage points. ---------------- Associated Press Writer Tim Martin contributed to this report. ---------------- Online: Comerica Bank: http://www.comerica.com MSU Institute for Public Policy and Social Research: http://www.ippsr.msu.edu. Published: Wed, Dec 7, 2011