Economists at the University of Michigan think that possible tariffs and other factors will slow economic growth in the state.
The economic outlook from the Research Seminar in Quantitative Economics (RSQE) is not predicting an outright downturn, but job growth is expected to slow in Michigan.
Already, job growth in the state has slowed. In 2023, 80,000 new jobs were created. Last year, there were 38,000 new jobs. Job growth is expected to go down again this year and in 2026, job gains could be as low as 18,500, according to the RSQE.
New tariffs on steel and aluminum imports are expected to eliminate about 600 jobs by 2026 in transportation equipment manufacturing. The economists estimate that each lost job in that industry will result in another three job losses statewide. That could amount to about 2,300 jobs lost next year.
Tariffs could also increase inflationary pressures. The latest data on inflation show continued moderation.
“Unfortunately, higher tariffs and slower growth of the labor force will put upward pressure on prices across the economy, but we expect those factors to be largely offset by disinflationary pressures in services,” the RSQE Michigan Economic Outlook for 2025-2026 reported in its Executive Summary.
The university economists add there is substantial uncertainty about the estimates, but did not specify the source of that uncertainty.
