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FDIC: State’s Employment Trends Worsen
CHICAGO — Michigan ranked right up there with hurricane-ravaged Louisiana and Mississippi in year-over-year job losses in the third quarter of 2005. Once again, the manufacturing sector accounted for most of the job losses, according to the Federal Deposit Insurance Corp.’s quarterly economic profile of the state.
The Grand Rapids-Wyoming metro area, however, was one of only five in the state that reported job gains. Combined, the Grand Rapids-Wyoming, Ann Arbor, Jackson, Kalamazoo-Portage and Muskegon-Norton Shores areas added 3,300 jobs.
Most major job sectors, in fact, experienced either job losses or slower growth. The government sector lost jobs in the third quarter after having gained 5,400 jobs in the second quarter of last year. The FDIC attributed the government job losses to the squeeze on state tax revenues.
According to the agency, poor employment conditions, slow income growth and fairly slow population growth have combined to heap more financial stress on Michigan households.
Home values in Michigan appreciated 4 percent from the third quarter of 2004 to the third quarter of 2005 but increased 12 percent on average for the nation. As the FDIC pointed out, the slower home appreciation limits Michigan homeowners from tapping home equity to the same extent as homeowners in other areas of the country.
Bankruptcies and foreclosures in the state remained above the national average, with the volume of loans in foreclosure at 1.6 percent in the third quarter, compared to a national average of 1 percent.
The agency reported that recent announcements regarding Delphi’s bankruptcy and General Motors’ planned plant closings in Lansing, Flint and Ypsilanti in 2008 have further dimmed near-term employment prospects. Delphi employs 15,000 people in Michigan, many of them concentrated in the Grand Rapids-Wyoming, Saginaw, Flint, and Detroit-Warren-Livonia metro areas.
The U.S. Department of Energy predicts natural gas prices will rise 44 percent in the Midwest during the winter months, which is the largest increase forecasted for any region in the country. Michigan’s natural gas bills are expected to be 51 percent higher this winter than last winter. According to the U.S. Census Bureau, an estimated 87 percent of Michigan homes use natural gas as their main heating fuel, which makes Michigan the second largest natural gas user among all states.