U-M forecast calls Detroit's economy encouraging overall, with some risks ahead

A fresh University of Michigan forecast reads Detroit's economy as "encouraging overall," even while the state around it sheds workers.

The September 2026 Detroit Economic Outlook, which projects through 2031, found that Detroit's labor force grew 2.9% between May 2025 and May 2026. Over the same twelve months, Michigan's workforce shrank by 2.2%. A city adding workers while its state loses them is the kind of split that gets an economist's attention.

The report puts Detroit's unemployment rate at 11%, and the economists are careful about what that number means. The rise, they write, reflects more residents stepping into the job market to look for work rather than a wave of layoffs. The report describes the household data as "somewhat noisy" in recent months, with job counts and counts of employed residents pulling in different directions. The outlook pairs that optimism with a set of risks ahead.

None of this arrives from a single desk. The outlook is produced through the City of Detroit University Economic Analysis Partnership, which pairs the city with the University of Michigan, Michigan State University, and Wayne State University.

The forecasts are not academic exercises. They feed the city's Revenue Estimating Conference, where Detroit sets the revenue assumptions its budget rests on. At the February 2026 conference, the city estimated FY2026 general fund recurring revenues at $1.42 billion, up $14.6 million from its September 2025 estimate.

For Detroiters, that chain matters. A labor force that keeps growing is what lets the city plan on steady revenue instead of bracing for a shortfall, and it is the reason economists can call a rising unemployment rate a sign of people entering the market rather than leaving it.

The accepted forecasts and Revenue Estimating Conference materials are posted publicly in the Office of the Chief Financial Officer's Revenue and Economic Reports archive at detroitmi.gov, for anyone who wants to read the full numbers rather than the summary.