Employment and home prices increase in Detroit area

•The unemployment rate in Detroit and across the state has been decreasing; (monthly)
•The Purchasing Manager’s Index for Southeast Michigan increased from December 2013 to January 2013; (monthly)
•The Commodity Price Index experienced a decrease from November 2013 to December 2013 for Southeast Michigan; (monthly)
•Standard and Poor’s Case-Shiller Index show that the prices of homes in the Detroit area have been experiencing an increase; (monthly)
•The Consumer Price Index in the Detroit-Ann Arbor area experienced a decrease from October 2013 to December.
Slide2According to the most recent data provided by the Michigan Department of Technology, Management and Budget, from November to December of this year the unemployment rate for the State of Michigan has decreased from 8.8 to 8.4 percent. The City of Detroit also experienced an unemployment rate decrease. In November the rate was recorded at 15.1 percent and in December it was recorded at 14.6 percent. In 2013 the city’s unemployment peak was in January; it was recorded at 19.1. Unemployment rates for Michigan in 2014 have not yet been made available through the Michigan Department of Technology, Management and Budget.

Slide4The number of employed in the City of Detroit increased 28,125 people in November to 286,955 in December of 2013. In December of 2012 there were 287,550 people employed.

Slide6The above chart shows the number of people employed in auto manufacturing industry in the Detroit Metropolitan Statistical Area throughout 2012 and into 2013. Although there was a peak of employment in the auto manufacturing and auto parts manufacturing industries from in November (92,400 people were employed in the Detroit MSA) that number decreased in December. In December it was reported there were 92,00 people employed in these industries; in December of 2012 there were 78,200 people reported to be employed.

Slide8

The Purchasing Manger’s Index (PMI) is a composite index derived from five indicators of economic activity: new orders, production, employment, supplier deliveries, and inventories. A PMI above 50 means the economy is expanding.

According to the most recent data released on Southeast Michigan’s Purchasing Manager’s Index, there was a increase of 1.7 points from December 2013 to January 2014. In January 2014, a PMI of 52.3 was recorded, which is reflective of a slight increase in new orders and production; these indicators typically are lower during the end of the year.

Slide10

The Commodity Price Index, which is a weighted average of selected commodity prices, was recorded at 56.7  in January 2014, which was 4.4 lower than the previous month.

Slide12 Slide13

The above charts show the Standard and Poor’s Case Shiller Home Price Index for the Detroit Metropolitan Statistical Area. The index includes the price for homes that have sold but does not include the price of new home construction, condos, or homes that have been remodeled.

According to the index, the average price of single-family dwellings sold in Metro Detroit was $93,490 in November 2013. This was an increase of approximately $13,850 from the average price in November 2012.

Slide15 Slide16The Consumer Price Index measures the change in prices in a fixed market. The index is based on prices of “food, clothing, shelter, fuels, transportation fares, charges for doctors’ and dentists’ services, drugs, and the other goods and services that people buy for day-to-day living,” according to the Bureau of Labor Statistics.

The above graphs show the percent change in the price index measurements. The first graph shows there was a .7 percent decrease in the overall Consumer Price Index from October to December of 2013 in the Detroit-Ann Arbor-Flint area. According to the Bureau of Labor Statistics, this is mainly based on the fact that energy costs decreased by 3 percent.

For the Consumer Price Index Less Food and Energy, there was a 0.6 percent decrease in the index to 1.3 because of a decrease in apparel and recreation costs.

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