Economics in Brief
High gas prices in part caused a drop in consumer sentiment, which is at a five-month low. According to a consumer survey from Thomson Reuters and the University of Michigan, consumer sentiment plunged nearly 10 points in March to 68.2 from February’s 77.5.
Economists polled by Reuters had predicted the index would fall only to 76.5. “It is quite disappointing. It shows there are going to be some headwinds to consumer spending now that gasoline prices are on the rise from Middle East and North Africa worries,” said Sean Incremona, economist at 4Cast Ltd. in New York.
According to a separate report from the Commerce Department, consumer spending was on the rise, but continued increases in the cost of gas may cause consumers to hold more tightly to their wallets.
High prices at the pump are causing Americans to be less confident in the economic recovery as well, according to the latest survey from Gallup.com.
Michigan Economic Recovery Outpaces the Nation
According to a report from Comerica Bank, Michigan is now “experiencing a stronger recovery in its labor markets than the nation.” Dana Johnson, Comerica’s chief economist, said: “With its manufacturing sector leading the way, Michigan is repeating the historical pattern of having a stronger recovery than the nation after having a much worse downturn. Revised labor market data now confirm that Michigan is expanding quite briskly.”
Michigan’s unemployment rate has dropped more than in other states — to 10.4 percent in February — due in large part to people dropping out of the labor force. However, Johnson added that the state’s “non-farm payroll growth has outpaced the nation.”
From February 2010 to February 2011, non-farm payrolls in Michigan increased 1.7 percent compared with a gain of 1 percent nationwide. Johnson also forecast that Michigan’s boom won’t last long, saying that the state’s job growth beyond 2011 will lag the nation because of sluggish population growth.
Michigan lawmakers officially passed legislation that will repeal the state law requiring individual price tags on most retail items. The bill had the support of retail trade groups that claimed the law resulted in higher prices.
Some Democrats opposed the change in law saying it is a consumer protection against misleading pricing and would be a hardship on consumers used to seeing price tags on individual items. The revised regulations require retailers to post an item’s price where it can be clearly seen, but not on each individual item.
Degreed Job Seekers Have Reason to Smile
“The war for talent is back on,” said Chris Stark, territory leader for Detroit at Troy-based staffing company Kelly Services, explaining there is more demand than supply for highly skilled professionals. “Companies are working hard to retain their talent as recruiters look to those who are already gainfully employed to fill open positions.”
The demand is highest in Metro Detroit for engineers, IT professionals and registered nurses, according to Kelly Services. “We’re seeing demand for lots of engineers — industrial, mechanical and software — related to the rebound in the auto industry,” Stark said.
For the more specialized positions, he added, Kelly is being forced to look for talent outside of Metro Detroit to meet client demand. In the IT field, Kelly Services has seen demand for systems analysts increase by 33 percent compared with last year. Web developers are seeing a similar spike in demand.
In the health care sector, the demand for registered nurses is up nearly 47 percent the first two months of the year. Demand for health care support positions — such as pharmacy assistants or physical therapy assistants — also is up.
State Unemployment Benefits Reduced By Six Weeks
Michigan Gov. Rick Snyder recently signed a bill passed by state lawmakers that reduces state-paid unemployment benefits to 20 weeks beginning next year, ignoring calls from state Democrats and worker advocacy groups to veto the measure.
The bill does three things: It made a necessary technical change to the state’s unemployment insurance program so workers remain eligible for federal extended unemployment benefits. Without that technical change, 180,000 jobless residents would have been cut off from 20 weeks of federal benefits.
The bill also requires the state Unemployment Insurance Agency to step up its efforts to reduce fraud and go after penalties.
The amendment, which is being praised by the Michigan Chamber of Commerce and the Michigan Manufacturing Association, will reportedly save state businesses up to $300 million annually.
“This was a necessary compromise,” said Snyder’s press secretary. “[Snyder] had the bigger picture in mind — his priority was to ensure no one receiving unemployment benefits was cut off abruptly.”
Speaking to reporters after a speech to the Michigan Association of Counties, Snyder said, “We’re still suffering in this state. I wanted to make sure we could do whatever to help these people to continue on a path until they can find a job.”