State of Michigan

2027-2028 Michigan Economic Outlook

Updated August 31, 2026

The U.S. economy has transitioned into a mature, moderate-growth phase marked by high volatility and structural risks. The Federal government continues to pursue an expansionary fiscal stance, characterized by the "One Big Beautiful Bill Act," which drives long-run structural budget deficits alongside a record $38 trillion national debt. While 10% tariffs on imports aim to boost domestic manufacturing, these revenues have not been sufficient to offset income tax reductions, pushing the Federal Reserve to maintain elevated yields to counter persistent inflationary pressures. Core inflation (CPI) is projected to moderate toward 2.7% by 2028, but long-term borrowing costs remain high, with the 10-year Treasury yield projected to climb to 5.07% and the 30-year yield to 5.44% by the end of 2028. Despite tight labor markets constrained by restrictive immigration policies, total nonfarm employment is forecast to expand from 155.89 million in 2023 to 162.71 million by 2028. Concurrently, the automotive sector faces structural realignment as automakers navigate shifting demand trajectories between internal combustion engine (ICE) platforms and electric vehicles (EVs) amid localized trade measures. National per capita personal income is projected to reach $90,467 by 2028, establishing a benchmark for regional comparisons.

Total nonfarm employment is projected to grow modestly from 4.46 million in 2023 to 4.54 million by 2028. The manufacturing sector remains under pressure, projected to decline from 618.1 thousand jobs in 2023 to 581.0 thousand in 2028, with motor vehicle manufacturing contracting to 44.8 thousand jobs. This reflects the "Detroit Three" eliminating over 20,000 U.S. salaried positions to offset EV transition costs, alongside project scale-backs like Ford's Marshall battery plant due to slower-than-expected EV adoption. However, service sectors remain resilient; education and health services are projected to grow from 690.3 thousand jobs in 2023 to 763.6 thousand by 2028. The statewide unemployment rate is forecast to settle at 4.8% by 2028.

Updated August 31, 2026